TANJUNG OFFSHORE BERHAD - Malaysiastock.biz 2 TANJUNG OFFSHORE BERHAD (662315-U) ANNUAL REPORT 2008 CORPORATE INFORMATION BOARD OF DIRECTORS Senator Datuk Wira Syed Ali Bin Tan Sri

TAN

JUN

G O

FFSHO

RE B

ERH

AD

(662315-U)

Annual R

eport 20

08

No. 8-3, Jalan Puncak Setiawangsa 4, Taman Setiawangsa, 54200 Kuala Lumpur.Tel: +60-3-4252 3888 Fax: +60-3-4252 2202

www.tanjungoffshore.com.my

Sustainable Growth 20082008a n n u a l r e p o r t

TANJUNG OFFSHORE BERHAD(662315-U)

2 CORPORATE INFORMATION

6 CORPORATE STRUCTURE

8 TANJUNG OFFSHORE BERHAD

10 TANJUNG OFFSHORE SERVICES SDN BHD

11 TANJUNG KAPAL SERVICES SDN BHD

12 TANJUNG MAINTENANCE SERVICES SDN BHD

13 TANJUNG NEWENERGY SERVICES SDN BHD

14 TANJUNG PETROCONSULT SDN BHD

15 TANJUNG CSI SDN BHD

16 PT TANJUNG OFFSHORE NUSANTARA

17 HERCULES TANJUNG ASIA SDN BHD

18 CENDOR MOPU PRODUCER LIMITED

19 TANJUNG CITECH UK LIMITED

CITECH ENERGY RECOVERY SYSTEMS UK LIMITED

TANJUNG CITECH SDN BHD

20 GAS GENERATORS (M) SDN BHD

22 CORPORATE HISTORY AND MILESTONES

24 FIVE (5) YEARS GROUP FINANCIAL HIGHLIGHTS

26 NOTICE OF ANNUAL GENERAL MEETING

29 STATEMENT ACCOMPANYING

NOTICE OF THE FIFTH ANNUAL GENERAL MEETING

31 DIRECTORS’ PROFILE

36 CHAIRMAN’S STATEMENT

42 MANAGING DIRECTOR’S REVIEW

50 AUDIT COMMITTEE REPORT

52 STATEMENT ON INTERNAL CONTROL

53 STATEMENT OF CORPORATE GOVERNANCE

58 OTHER DISCLOSURE REQUIREMENTS

60 FINANCIAL STATEMENTS

112 LIST OF PROPERTIES OWNED BY THE GROUP

114 ANALYSIS OF SHAREHOLDINGS / WARRANTHOLDINGS

FORM OF PROXY

Contents

2 TANJUNG OFFSHORE BERHAD (662315-U) ANNUAL REPORT 2008

CORPORATE INFORMATION

BOARD OF DIRECTORS

Senator Datuk Wira Syed Ali Bin Tan Sri Syed Abbas Alhabshee (Independent Non-Executive Chairman)

Haji Omar Bin Khalid (Managing Director)

Haji Abdullah Bin Hashim (Executive Director)

Haji Hamidon Bin Md Khayon (Executive Director)

Za’aba bin Sedek (Executive Director)

Haji Ab Wahab Bin Haji Ibrahim (Independent Non-Executive Director)

Edwanee Cheah Bin Abdullah (Independent Non-Executive Director)

George William Warren Jr (Independent Non-Executive Director)

TANJUNG OFFSHORE BERHAD (662315-U) ANNUAL REPORT 2008 3

AUDIT COMMITTEE

ChairmanHaji Ab Wahab Bin Haji Ibrahim(Independent Non-Executive Director)

MemberSenator Datuk Wira Syed Ali Bin Tan Sri Syed Abbas Alhabshee (Independent Non-Executive Chairman)

Edwanee Cheah Bin Abdullah (Independent Non-Executive Director)

George William Warren Jr(Independent Non-Executive Director)

COMPANY SECRETARIES

Kang Shew Meng (MAICSA 0778565)Seow Fei San (MAICSA 7009732)

312, 3rd Floor, Block CKelana Square, 17 Jalan SS7/2647301 Petaling JayaSelangor Darul Ehsan

REGISTERED OFFICE

312, 3rd Floor, Block CKelana Square, 17 Jalan SS7/2647301 Petaling JayaSelangor Darul EhsanTel : 03-7803 1126

HEAD/ MANAGEMENT OFFICE

No. 8-3, Jalan Puncak Setiawangsa 4Taman Setiawangsa54200 Kuala LumpurTel : 03-4252 3888Website : http://www.tanjungoffshore.com.my

AUDITORS / REPORTING ACCOUNTANTS

AljeffriDean (Firm No.: AF 1366)Chartered Accountant2-5-13, 5th Floor, Menara KLH(Business Centre)No. 2, Jalan Kasipillay51200 Kuala LumpurTel : 03-2381 1170

LEGAL ADVISORS

Shearn Delamore & Co7th Floor, Wisma Hamzah-Kwong HingNo. 1, Leboh Ampang50100 Kuala LumpurTel: 03-2070 0644

Nashir, Johal & Co.A-901-3, Level 9, Kelana Brem Tower 1Jalan SS7/15 (Jalan Stadium)47301 Kelana JayaSelangorTel: 03-7492 0766

Masturah & CoSuite 1B-2, First FloorWisma Dang WangiNo. 38, Jalan Dang Wangi50100 Kuala LumpurTel: 03-2694 5671

Mah – Kamariyah & Philip KohNo. 3, Persiaran HampshireOff Jalan Ampang50450 Kuala LumpurTel: 03-2163 0208

PRINCIPAL BANKERS

Malayan Banking Berhad (Company No. 3813-K)Setapak Business Centre2nd Floor, Maybank Setapak343 Jalan Pahang53000 Kuala LumpurTel : 03-4022 0784/ 92/ 95

HSBC Bank Malaysia Berhad (Company No. 127776-V)10th Floor, Bangunan HSBC2 Leboh Ampang50100 Kuala LumpurTel: 03-2070 0744

Standard Chartered Bank Malaysia Berhad(Company No. 115793-P)Level 13, Menara Standard Chartered30 Jalan Sultan Ismail50250 Kuala LumpurTel: 03-2117 7810


PRINCIPAL BANKERS

Kuwait Finance House (Malaysia) Berhad(Company No. 672174-T)Level 18, Tower 2, MNI Twins11 Jalan PinangP.O. Box: 1010350704 Kuala LumpurTel: 03-2055 7777

AmIslamic Bank Berhad (Company No. 295576-U)Level 16, Menara DionJalan Sultan Ismail50250 Kuala LumpurTel: 03-2026 3939

Bank Pembangunan Malaysia Berhad(Company No. 16562-K)Bandar Wawasan, 1016Jalan Sultan IsmailPeti Surat 1078850724 Kuala LumpurTel: 03-2611 3888

REGISTRAR

Epsilon Registration Services Sdn Bhd (Company No. 629261-T)Level 17, The Gardens North TowerMid Valley City Lingkaran Syed Putra59200 Kuala LumpurTel : 03-2264 3883Fax: 03-2282 1886

STOCK EXCHANGE LISTING

Main Board of Bursa Malaysia Securities Berhad

STOCK INFORMATION

Stock Name: TGOFFS, TGOFFS-WA, TGOFFS-WB

Stock Code: 7228, 7228-WA, 7228-WB

Bloomberg Code: TOFF MK

4 TANJUNG OFFSHORE BERHAD (662315-U) ANNUAL REPORT 20084 TANJUNG OFFSHORE BERHAD (662315-U) ANNUAL REPORT 2008

TANJUNG OFFSHORE BERHADTANJUNG OFFSHORE SERVICES SDN BHDTANJUNG KAPAL SERVICES SDN BHDTANJUNG PETROCONSULT SDN BHDTANJUNG NEWENERGY SERVICES SDN BHDTANJUNG CITECH SDN BHDKuala Lumpur (Head Offi ce)No. 8, Jalan Puncak Setiawangsa 4Taman Setiawangsa, 54200 Kuala LumpurTel : +603 4252 3888, Fax : +603 4252 1805www.tanjungoffshore.com.my

TANJUNG CSI SDN BHDKuala Lumpur (Operation Centre)No. 9-8 Jalan 15/155B,Esplanade Commercial Park,Bukit Jalil, 57000 Kuala Lumpur.Tel : +603 8994 9330Fax : +603 8994 9959 (Sales & Engineering Division)Fax : +603 8994 9969 (Contracts & Administration Division)Email : [email protected]

TANJUNG MAINTENANCE SERVICES SDN BHDTANJUNG KAPAL SERVICES SDN BHDKemaman (Operation/Maintenance Centre)Lot D1 & D2, Kawasan MIEL Teluk Kalung,24007 Kemaman,Terengganu Darul Iman,Malaysia.TKS : +609 863 3088 Fax : +609 863 3504Email : [email protected] : +609 863 5390 Fax : +609 863 5387Email: [email protected] : www.tanjungmaintenance.com.my

TANJUNG MAINTENANCE SERVICES SDN BHDKemaman Supply Base CentreWarehouse No 3, Door 1,2,3,7 & 8,Kemaman Supply Base, Phase 1,24007 Kemaman, Terengganu Darul Iman, Malaysia.Tel : +609 862 3360/ 62Fax : +609 862 3361Email : [email protected]

TANJUNG KAPAL SERVICES SDN BHDKemaman Supply Base (Operation Offi ce)Door 5, 1st Floor, Admin, Building A,Kemaman Supply Base,24000 Kemaman,Terengganu Darul Iman, Malaysia.Tel : +609 863 3521Fax : +609 863 1336Email : [email protected]

HERCULES TANJUNG ASIA SDN BHDUnit 10.01 Level 10, Menara TA One,22, Jalan P.Ramlee,50250 Kuala Lumpur, Malaysia.Tel : +603 2166 6616Fax : +603 2166 6617Email : [email protected] : www.herculesoffshore.com

GAS GENERATORS (M) SDN BHDLot 5189, Unit 2, Sg Ramal,Off Tanming Jaya,43300 Balakong,Selangor, Malaysia.Tel : +603 8961 3390Fax : +603 8962 3390Email : [email protected]

TANJUNG MAINTENANCE SERVICES SDN BHDTANJUNG OFFSHORE SERVICES SDN BHDMiri (Operation/Maintenance Center)Lot MCLD, 1315, Jalan Primula,Piasau Industrial Estate,Miri, Sarawak, Malaysia.Tel : +6085 661 330Fax : +6085 661 320email :[email protected] :[email protected]

TANJUNG MAINTENANCE SERVICES SDN BHD (TMS)TANJUNG KAPAL SERVICES SDN BHD (TKS)Labuan (Operation/Maintenance Centre)SK 0467, Kampung Sungai Kling,Off Jalan Rancha Rancha,87008 Wilayah Persekutuan Labuan.(TMS) Tel : +6087 414 481 Fax : +6087 413 234Email: [email protected](TKS) Tel : +6087 410 387 Fax : +6087 410 424Email :[email protected]

TANJUNG NEWENERGY SERVICES SDN BHDPerak-Manjung (Operation Offi ce)No 150-150A Jalan PM/2,Pusat Bandar Sri Manjung,32040 Sri Manjung, Perak Darul Ridzuan.Tel : +605 669 8494 Fax : +605 668 1360Email : [email protected]

TANJUNG OFFSHORE SERVICES SDN BHD TANJUNG PETROCONSULT SDN BHDPasir Gudang (Operation Offi ce)No 38A, Jalan 9/17 Perjiranan 9,81700, Pasir Gudang, Johor Darul Takzim.Tel : +607 255 2886Fax : +607 255 2986Email : [email protected]

PT TANJUNG OFFSHORE NUSANTARANo. 214, Outer Ring Road, Bogor Utara,Taman Yasmin, Sektor - 6,Kota Bogor,16132 Indonesia.Tel : +62-251-754-2333Fax : +62-251-754-2555Email : [email protected]

TANJUNG OFFSHORE SERVICES SDN BHDBintulu (Branch Offi ce)Lot 969, Block 26,Kidurong Light Estate,KID, Jalan Tanjong Kidurong,97000 Bintulu, Sarawak, Malaysia.Tel : +6086 252 198Fax : +6086 255 198Email : [email protected]

TANJUNG CITECH UK LIMITEDCITECH ENERGY RECOVERY SYSTEMS UK LIMITEDUnit 22, Somerden Road,Hull HU9 5PE,United Kingdom.Tel : + 44 (0) 14 8271 9746Fax : + 44 (0) 14 8271 9740Email: [email protected]


TANJUNG OFFSHORE BERHAD (662315-U) ANNUAL REPORT 2008 5TANJUNG OFFSHORE BERHAD (662315-U) ANNUAL REPORT 2008 5

ManjungManjung

Kuala LumpurKuala Lumpur

KemamanKemaman

P. GudangP. Gudang

MiriMiri

LabuanLabuanManjung

Kuala Lumpur

Kemaman

P. Gudang

Miri

Bintulu

Labuan

UK

ASEAN



TANJUNG OFFSHORE BERHAD

92.86%

TNE98.75%

TMS100%

TPC

80%

PTTON100%

TKS100%

TCSI100%

TOS100%

TOMS

100%

CERS-UK50%

HTA

100%

TC-UK51%

GASTEC20%

CMPL

CORPORATE STRUCTURE

GASTEC: Gas Generators (Malaysia) Sdn Bhd

CMPL: Cendor Mopu Producer Ltd

PTTON: PT Tanjung Offshore Nusantara

TOMS: Tanjung Offshore Marine Services Sdn Bhd

TOS: Tanjung Offshore Services Sdn Bhd

TCSI: Tanjung CSI Sdn Bhd

TKS: Tanjung Kapal Services Sdn Bhd

TCSB: Tanjung Citech Sdn Bhd

TC-UK: Tanjung Citech UK Limited

CERS-UK: Citech Energy Recovery Systems Ltd

HTA: Hercules Tanjung Asia Sdn Bhd

TPC: Tanjung Petroconsult Sdn Bhd

TMS: Tanjung Maintenance Services Sdn Bhd

TNE: Tanjung NewEnergy Services Sdn Bhd

100%

TCSB


The details of the subsidiaries and associated company of Tanjung as at 31 March 2009 are as follows: -

Principal Activity

Integrated service provider to the oil and gas and related industries.

Provision of engineering and professional manpower services to the oil and gas and related industries.

Provision of maintenance services to the oil and gas and related industries.

Provision of project management services to the engineering and energy industries.

Ownership of vessel and provision of ship management services to the oil and gas and related industries.

Ownership and leasing offshore vessels to local and international oil majors.

Design, manufacture and supply of all types of cathodic protection equipment, parts and related services for the onshore and offshore services.

Manufacturing and supply of gas generators to both industrial and oil and gas industry.

Manufacturing and marketing of waste heat recovery units for the offshore oil and gas industry.

Ownership of “CiBAS Technology patent and all Intellectual Property Rights.

Manufacture of waste heat recovery units for the oil and gas industry.

Integrated service provider to the oil and gas and related industries in Indonesia.

To own, lease, sub-lease, maintain, operate, manage the Mobile Offshore Production Unit to carry out oil and gas operations.

Provision of drilling services.

Effective Equity Interest(%)

100.0

100.0

98.75

92.86

100.0

100.0

100.0

51.0

100.0

100.0

100.0

80.0

20.0

50.0

Company

TOS

TPC

TMS

TNE

TKS

TOMS

TCSI

GASTEC

TCSB

TC-UK

CERS-UK

PTTON

CMPL

HTA

Date And Place Of Incorporation/Acquisition

28.04.1983Malaysia

17.10.1991Malaysia

24.05.1996Malaysia

07.03.1997Malaysia

17.09.1994Malaysia

01.11.2006Malaysia

03.11.2006Malaysia

05.01.2009Malaysia

06.03.2009Malaysia

22.08.2008

22.08.2008

16.01.2008

07.11.2005Malaysia

24.01.2008Malaysia

Issued And Fully Paid-Up Share Capital(RM)

7,500,000

4,200,000

4,000,000

350,000

10,000,000

2

4,000,000

4,791,437

2

£400,000

£500,000

USD150,000

USD1,960,000

250,000

CORPORATE STRUCTURE

Indonesia

Associated Companies

United Kingdom




Tanjung Offshore Berhad (Tanjung) was incorporated in Malaysia on 11 August 2004 and its shares were listed on the Second Board of Bursa Malaysia Securities Berhad (Bursa Malaysia) on 27 May 2005 and subsequently transferred to the Main Board of Bursa Malaysia on 8 September 2006. Tanjung is principally an investment holding company, whilst its subsidiaries and associated companies are principally involved in the provision of engineering equipment, shipowning, ship management and chartering services, equipment maintenance services, drilling and production platform services and professional manpower services to the oil and gas and related industries in Malaysia and the region.

Tanjung’s main operating subsidiary, Tanjung Offshore Services Sdn Bhd (TOS) commenced operations in March 1990. TOS is involved in providing comprehensive services to the oil and gas industry and holds various exclusive agencies for a wide range of engineering equipment and parts such as turbines, compressors, pumps and control valves in Malaysia. Tanjung commenced its marine support services in 1994 via the setting up of a Marine Vessel Department within TOS and the formation of Tanjung Kapal Services Sdn Bhd (TKS), a ship ownership and management company.

In May 1996, Tanjung Maintenance Services Sdn Bhd (TMS) was incorporated to provide complete maintenance support services to the oil and gas industry such as manpower, maintenance and repair works for offshore oil and gas platforms and onshore plants.

Thereafter, various other subsidiaries and associated company were set up and acquired to further enhance the provision of integrated support services to the oil majors such as Tanjung NewEnergy Services Sdn Bhd (TNE), Tanjung Petroconsult Sdn Bhd (TPC), Tanjung CSI Sdn Bhd, Tanjung Citech UK Limited, Citech Energy Recovery Systems UK Limited, Tanjung Citech Sdn Bhd, PT Tanjung Offshore Nusantara, Gas Generators (Malaysia) Sdn Bhd and Cendor Mopu Producer Limited.

EXPLORATION Surface GeochemistrySeismic activities Vessel servicesDrilling services

DEVELOPMENTHookup & commissioningDrilling servicesStructure & constructionVessel servicesEngineering Equipment

PRODUCTIONFlow of oil & gas to onshore plantsPower generationSystems application Vessel servicesEngineering equipmentMaintenance services

MAINTENANCERetrofi ttingStructural strength & corrosion assessmentVessel servicesEngineering equipment maintenance

ABANDONMENTDismantling of structuresDecommissioning of machinery & equipmentTransportation of physical parts and equipmentPollution control exercise and assessmentVessel services

As of todate, the Tanjung Group is a reputable integrated oil and gas service provider within the Malaysian oil and gas industry and has been expanding its services within the domestic and international markets. Tanjung Group is actively involved in both the upstream and downstream markets within the oil and gas industry and participates in all stages of the life cycle of the Production Sharing Contracts as follows:-



TANJUNG OFFSHORE SERVICES SDN BHD

TANJUNG Offshore Services Sdn Bhd (TOS) is a wholly owned subsidiary of

Tanjung Offshore Berhad (Tanjung). TOS commenced business in mid 1990s and

has since grown into a reputable integrated service provider for the oil and gas

industry. With years of experience in the oil & gas industry, TOS offers services

in the provision of customised engineered equipment, offshore vessel supprt

services, drilling services, project management of contracts, spares and parts for

equipment and other related support services. TOS is one of the main operating

companies within the Tanjung Group of companies with offering a diverse range

of product and services to the oil majors.

Having obtained various Petronas licences for various categories of products and

services, TOS is also the exclusive agent in Malaysia for various world-renowned

Original Equipment Manufacturer (OEM) such as gas and steam turbines,

compressors, centrifugal pumps, control systems, switchgears, instrumentations

and control valves that are widely used both in the upstream and downstream

activities of the oil and gas industry.

TOS has a full package of supplies and services which entails the initial

engineering design layout, project management & planning, implementation,

installation, commissioning followed by scheduled maintenance, troubleshooting

and reliable after-sales service. TOS identifi es the requirement of each client,

and assist in the front-end engineering design (FEED) before recommending

the most cost effective and effi cient solutions. Throughout this phase, constant

and comprehensive technical discussions with our prospective clients as part

of our value added services in developing innovative ideas in the exploration,

production, maintenance and abandonment stages of fi elds’ development.

Together with our clients, we continue to closely monitor the progress of projects

undertaken to ensure various process methods are in accordance to the

approved design and specifi cations. TOS is continuously increasing its products

and service offerings to meet the stringent requirements of the industry.

Platform services

Engineering equipment

Maintenance services

Drilling services Well intervention services Offshore support vessels


TANJUNG KAPAL SERVICES SDN BHD

Tanjung Kapal Services Sdn. Bhd. (TKS) is a wholly-owned subsidiary of Tanjung Offshore Berhad (Tanjung). It is the shipping division of Tanjung Group and its principal activity is to provide offshore support vessels and related marine services to the oil and gas industry.

Its business activities can be categorised as follows :

1. Vessel ownership;2. Vessel management/operator;3. Vessel agency and forwarding activities;4. Vessel brokering; and5. Marine services consultancy

TKS was incorporated on 17 September 1994 and employed various personnel to develop its International Safety Management (ISM) certifi cation and overseeing the construction and commissioning of Tanjung Group’s vessels at various shipyards in Malaysia.

In accordance with ISM requirements, TKS obtained its full Document of Compliance from the Malaysian Marine Department in 2006. At the same time, TKS also obtained the Safety Management Certifi cate (SMC) for its vessels from American Bureau of Shipping (ABS).

As of 31 March 2009, TKS owns and operate eight (8) offshore support vessels which consist of three (3) units of Anchor Handling Tug Supply vessels (AHTS), four (4) units of Straight Supply vessels (SSV) and one (1) unit of Tug & Supply vessel. Apart from that, TKS also manages three (3) units of vessels owned by Tanjung Offshore Services Sdn. Bhd.

As part of Tanjung Group’s fl eet expansion programme, technical teams at TKS are also supervising the construction and commissioning of fi ve (5) vessels currently under construction at various shipyards in Malaysia. These vessels are scheduled for delivery by 2010.

TKS organizational structure consists of Six Departments namely :

1. Marine Operations;2. Technical Services;4. Health, Safety, Security and Environment;5. Vessel Agency and Forwarding; and6. Finance and Administration.

TKS has its headquartered at Tanjung Group’s main offi ce in Kuala Lumpur. TKS also have operation branches and support offi ces at Kemaman Supply Base and Teluk Kalung in Terengganu as well as Asian Supply Base in Labuan.

MV Tanjung Dawai MV Tanjung Puteri 2 MV Tanjung Gaya

MV Tanjung Pinang 3

MV Tanjung Pinang 2

MV Tanjung Pinang 1


TANJUNG MAINTENANCE SERVICES SDN BHD

Tanjung Maintenance Service Sdn Bhd (TMS) was incorporated on 24 May 1996 to provide complete maintenance services to the oil and gas operators in Malaysia and the region. As of todate, TMS is operating from fi ve (5) main workshop/maintenance centres situated in Teluk Kalung and Kemaman Supply Base (both in Terengganu), Labuan, Miri and Bintulu. TMS currently employ 220 staff of various experiences and expertise. Our maintenance centres provide a “one stop” maintenance services to various upstream oil and gas operators such as Petronas Carigali Sdn Bhd, Sarawak Shell Berhad, Exxon Mobil Exploration and Production Malaysia Inc.,Talisman Malaysia Limited, Nippon Oil Ltd and Newfi eld Sarawak Malaysia Inc. and others.

Our maintenance workshops also provide various maintenance services to downstream petrochemical and power plants situated In Paka and Gebeng in Terengganu and Bintulu in Sarawak such as Petronas Dagangan Sdn Bhd, Petronas Penapisan (Terengganu) Sdn Bhd, Petronas Gas Berhad, BASF Petronas Chemicals Sdn Bhd, Petlin Malaysia Sdn Bhd and BP Chemical (M) Sdn Bhd.

Our complete maintenance services at our maintenance workshops include:-

• Services, repair, overhaul & test various types of rotating equipment;• Services, repair, retrofi t & test all types of valves;• Fabrication of parts and machining;• Metal coating or metal spray,• Specialised High Velocity Oxy Fuel (HVOF) and other types of coating;• Rotor dynamic balancing;• On-line greasing or lubrication;• Condition Based Monitoring (CBM) such as vibration monitoring;• Schedule oil sampling (SOS) and thermography;• Service, repair, overhaul and test of internal combustion for engineering

equipment; and• Pump testing facilities.

We are one of the few local service providers which have set up complete workshops in all the main oil and gas hubs in both Peninsular and East Malaysia. We are also ISO 9001 certifi ed and have trained our human capital and invested in the latest technologies to enable us to move towards niche and knowledge based maintenance technologies. In doing so, we aim to be at the forefront of the total solutions provider concept for maintenance services in the Malaysia and the region.

Overhaul & machining services

Valve on-site services

Gear box services

Gas turbine overhauling Repair of pump casing Welding & cutting services


TANJUNG NEWENERGY SERVICES SDN BHD

Tanjung NewEnergy Services Sdn Bhd (TNE) was established on 7 March

1997 to provide a wide range of energy related products and services which

are cost effi cient solutions to the oil majors. Our power generation systems are

also environmentally friendly through better use and management of energy

resources.

Our main engineering products are as follows:-

• RECIPROCATING COMPRESSORS;

• CENTRIFUGAL PUMPS;

• NITROGEN GAS GENERATOR;

• DYNAMIC POSITION SYSTEM;

• CCTV SURVEILLANCE SYSTEM FOR OIL AND GAS;

• UMBILICAL SUBSEA CABLES;

• SOLAR POWER PANELS; and

• SELF PRIMING MARINE PUMPS.

TNE has a total commitment to engineering excellence, fi tness for purpose,

design and an uncompromising approach to quality. TNE recognizes the benefi ts

of an effective quality assurance programme in promoting and achieving high

standards of service and minimizing costs and delay to project programmes.

Recently, TNE has been appointed by Technics Offshore Engineering Pte Ltd for

the exclusive provision of Reciprocating Compressor Applications.


TANJUNG PETROCONSULT SDN BHD

TANJUNG PETROCONSULT Sdn Bhd (TPC), which is a subsidiary of Tanjung Offshore Services Sdn Bhd known as one of the major Malaysian Contractor, has been providing its varied expertise in engineering, procurement and construction/commissioning for offshore and onshore oil & gas processing and production systems for major local oil & gas clients including PETRONAS, SHELL, EXXONMOBIL, MURPHY OIL and etc.

TPC has since 2003 established its core competency through its proven project management methodology and professional and qualifi ed manpower. TPC methodology encompasses its effective project management system covering key areas such as Planning & Control, Construction & Commissioning, Quality Assurance and HSE requirements which is the backbone of the delivery process in meeting the expectations of its clients.

As one of the TANJUNG group of companies, it will be capable of executing the other multi functional requirements in respect of procurement, including logistic support, supply chain management and project fi nancing.

Throughout the participation in varied projects, TPC has established the value added network connections capable of market penetration in the oil & gas sectors worldwide, assuring clients of meeting the required level of supply of resources and materials & equipment. It has established the recognition of its global capabilities in providing procurement scope services that has involved suppliers networks from China, India, Australia, Europe and UK. It has nurtured its strength in project alliance for the international oil & gas sector through its global reputation on ventures with known international Companies from UK, France and Australia.

TPC approach from the onset of its projects execution has relied on the principles of Total Quality Management through rigorous induction program and subsequent close monitoring of its performances in compliances with the QA/QC requirements. As for TPC’s ongoing commitment for quality, TPC is confi dent of attaining the ISO 9001:2008 Certifi cation.

TPC core business activities are:

EPC Division• Project Management Scope• Detailed engineering for both onshore and offshore plant/facilities• Plant Design and Management system (PDMS), BOCAD and As-Built• Procurement management scope• Construction engineering (fabrication requirements) including generation of

shop and construction drawing• Fabrication / Construction• Process equipment skids design and supply• Hook-up and Commissioning (HUC)• Plant/Facilities Modifi cation/Revamp/Retrofi t

Environmental & Positional Survey Division• 3D laser scanning and transportation of scanned data into 3D basic

infrastructure• 3D As Built for onshore and offshore• Dimensional Control for onshore and offshore• Conversion of scanned data into 3D Modeling• Remodeling of facilities data into 3D CAD format into PDMS and PDS• Remodeling or modeling of existing data for CAD


TANJUNG CSI SDN BHD

TANJUNG CSI Sdn Bhd (Tanjung CSI) is a wholly-owned subsidiary of Tanjung Offshore Berhad.

A spin-off from the Control & Instrumentation Department (CID) of Tanjung Offshore Services Sdn Bhd (TOS), Tanjung CSI began operations as a full company beginning January 1, 2008.

Tanjung CSI’s core activities are in providing Instrumentation, Detectors, Valves, Analyzers, Metering Systems, Process Control & Safety integrated system solutions and services, primarily to the Oil & Gas sector.

Our customers include leaders in the Malaysian Oil & Gas Industry, with Petronas being our key client as well as international players with projects in countries such as Vietnam, Indonesia, North Africa, Nigeria, Qatar, China and Turkmenistan.

In the area of industrial fi eld instrumentation and automation, Tanjung CSI represents, among others :• ABB – process & safety automation, measurement, analytical, actuation instrumentations and wet

gas metering system;• Autronica – fi re & gas integrated security systems and fi eld detectors;• SpectraSensors – gas analyzers for moisture, H2S and CO measurements;• Severn Glocon – control valves;• Severn Unival – choke valves;• Swinton Technology – liquid & gas metering solutions for custody transfer/allocation, multiphase

metering systems and pipe line detection system or PLDS;• PQE – power quality consultancy services; and• Brodie – PD meters, variable area fl ow meters and a full range of fl ow accessories.

Tanjung CSI is also a certifi ed system integrator for ABB Control & Safety systems, such as the Industrial IT 800 xA, Freelance, PlantguardTM and TriguardTM system product lines. Complementing ABB in the area of Fire and Gas system solution is Autronica Fire & Safety, which produce industry renowned SIL2 Addressable Fire and Gas systems and fi eld devices. Our scope of capabilities include the full suite of engineering services, beginning from design, system confi guration, system integration, testing, staging, training all the way up to system commissioning at site, as well providing post implementation services.

Our range of capabilities also extends to include fi eld instrumentation, and associated services, such as calibration, repair services, valves and positioned assembly works, as well as hybrid and gas analyzer sampling system design and fabrication.

Tanjung CSI also extends its services in the area of electrical power distribution and stability by performing and providing quality control and consultation to ensure that the electrical power supply of a site is regulated appropriately.

Tanjung CSI’s goal is to be recognized as a premier industrial control, safety and instrumentation solution provider for the Malaysian Oil & Gas industry.


PT TANJUNG OFFSHORE NUSANTARA

PT Tanjung Offshore Nusantara (PTTON) was incorporated in Indonesia on 16

January 2008. Tanjung Offshore Berhad (Tanjung) holds 80% in the equity of

PTTON while the remaining 20% equity is held by PT Expet Kontrol Nusantara.

PTTON commenced full operations in February 2008. Tanjung hopes to penetrate

into the vast oil and gas industry in Indonesia which offer vast potential for our

integrated services. Through PTTON, we hope to replicate our “one stop”

solution service provider business model in Indonesia.

PTTON’s core business activities include:-

• Provision of Engineering Equipment and Services;

• Provision of Offshore Support Vessels Services.

• Provision of Drilling and Production Platform Services.

• Provision of Maintenance Services.

• Provision of Engineering and Professional Manpower services.


HERCULES TANJUNG ASIA SDN BHD

Hercules Tanjung Asia (HTA) was incorporated in early 2008 as an associate

company of Tanjung Offshore Berhad. HTA is mainly focused in the provision of

drilling rig services to the exploration and development of oil and gas fi elds in the

ASEAN region with emphasis on the Malaysian waters.

The formation of HTA is the result of Tanjung Group’s collaboration with Hercules

Offshore Ltd, a renowned oil and gas drilling contractor worldwide in penetrating

the promising outlook of the oil and gas industry in the ASEAN region.

HTA lends its support to the oil majors’ exploration and development activities

through its range of complete drilling solutions. These include the provision of:-

• Complete range of drilling rigs and lift boats for both shallow and deep

waters; and

• Complete range of marine support activities and manpower expertise.

All activities performed by HTA are in compliance to the Health, Safety and

Environmental regulations at all times.

Based on the support of Hercules’ fl eet size of forty (40) offshore drilling units and

Tanjung Group’s impending fl eet size of sixteen (16) offshore support vessels, we

believe HTA will be a leading provider of one stop solution for drilling services in

this region.


CENDOR MOPU PRODUCER LIMITED

Cendor MOPU Producer Limited (CMPL) was incorporated on 7 November

2005. Tanjung Offshore Berhad (Tanjung) owns a 20% equity in CMPL while

the remaining 80% equity is held by Global Process Systems Sdn Bhd. CMPL’s

principal activity is to own, lease, sub-lease, maintain, operate, manage the

Mobile Offshore Production Unit (MOPU) to perform production operations within

Malaysian waters.

CMPL is the fi rst Malaysian company that introduced the concept and viability of

MOPU in extracting oil from marginal fi elds in Malaysian waters. The MOPU is a

jack up drilling rig which has been converted into an oil production platform which

is designed to operate on a stand alone basis at a designated location.

Since its inception, CMPL has been managing one (1) unit of MOPU which

is currently contracted to Petrofac (Malaysia PM-304) Limited. As of to date,

the MOPU is operating at Cendor oilfi eld which is situated off the coast of

Terengganu.

Given the successful launch of the MOPU, Tanjung will continue to explore new

ideas and concepts that facilitate the extraction of oil from fi elds in Malaysia and

the region.


TANJUNG CITECH UK LIMITEDCITECH ENERGY RECOVERY SYSTEMS UK LIMITEDTANJUNG CITECH SDN BHD

Tanjung Citech UK Limited

Tanjung Citech UK Limited (TCUK) was incorporated on 22 August 2008 as a wholly owned subsidiary of Tanjung Offshore Berhad. TCUK owns all intellectual property rights and patent for the “CiBAS Technology” in the manufacturing of Waste Heat Recovery Units (WHRU) for the oil and gas industry for the next fourteen (14) years.

The revolutionary CiBAS Technology design ensures maximum effi ciency in heat transfer, maximizing cost savings and minimized emissions in compliance with the Kyoto Protocol. The new WHRUs have less space requirements and are also lighter in weight.

Citech Energy Recovery Systems UK Limited

CiTech Energy Recovery Systems UK Limited (CERS) was incorporated on 22 August 2008 as a subsidiary of TCUK. CERS is the operating company that manufactures the WHRUs commonly used at the offshore platforms to reclaim heat from the exhaust of gas turbines which provide the power / electricity required to operate the platforms.

CERS is currently operating from Hull, United Kingdom and we have a range of international clients in the United States, Russia and the European region.

Tanjung Citech Sdn Bhd

Tanjung Citech Sdn Bhd (TCSB) was incorporated on 6 March 2009 as a subsidiary of Tanjung Offshore Berhad. TCSB is principally in the manufacturing and marketing of waste heat recovery units for the oil and gas industry in the Asia Pacifi c region.

TCSB is based in Kuala Lumpur, Malaysia and is actively pursuing new markets within the Asia Pacifi c region with technical support from CERS in Hull, United Kingdom.


GAS GENERATORS (M) SDN BHD

On 05 January 2009, Tanjung Offshore Berhad acquired as a 51% equity interest

in Gas Generators ( Malaysia) Sdn Bhd (Gastec) and its subsidiaries (Gastec

Group). Gastec Group is principally involved in the manufacturing and marketing

of gas generators in both the industrial and offshore oil and gas markets.

Nitrogen is an inert gas used primarily for purging of tanks and pipelines to

enhance overall plant safety. The generator produces nitrogen from compressed

air thereby eliminating the cost and hazard associated with transporting of

nitrogen gas cylinders offshore.

Gastec Group has operations in the ASEAN region with active presence in Kuala

Lumpur, Bangkok, Jakarta and Manila.

The Gastec Group also design and manufactures nitrogen gas generators for on-

site gas production facilities on long term “built, operate and transfer” and “built,

operate and own” contracts to both industrial and oil and gas industries.


MISSION AND PHILOSOPHYTo support the oil and gas industry as

a “one stop solutions provider” through:-

• Providing Quality Products & Services;

• Optimising Resources;

• New Technologies;

• Enhancing Technical Competencies; and

• Full Compliance to Health, Safety

and Environmental regulations.

OUR VISIONTo be the preferred integrated service provider

to the oil majors in Malaysia and the region.


1990 First commenced drilling operations with an exclusive agency agreement with the incorporation of Tanjung Offshore Services Sdn Bhd (“TOS”).

1993 TOS secured various exclusive agencies for engineering equipment such as gas turbines, gas compressors, control valves and pumps for offshore platforms.

1994 Tanjung Kapal Services Sdn Bhd (“TKS”) was incorporated to provide ship management services for leased vessels from third parties.

1996 Tanjung Maintenance Services Sdn Bhd (“TMS”) was set up to provide complete maintenance services to both offshore and onshore oil and gas operators through its operation centre in Kemaman, Terengganu.

2004 Tanjung NewEnergy Services Sdn Bhd commenced business to provide project management services to the engineering and energy industries in Manjung, Perak.

1991 Tanjung Petroconsult Sdn Bhd was incorporated to provide engineering and professional manpower services in Pasir Gudang, Johor.

27 May 2005 The entire 84 million ordinary shares of RM0.50 each in Tanjung Offshore Berhad (Tanjung) were listed on the Second Board of Bursa Malaysia Securities Berhad.

June 2005 TOS secured the fi rst Mobile Offshore Production Unit contract from Petrofac (Malaysia PM-304) Limited for the development of Cendor oilfi eld off the coast of Terengganu.

December 2005 TOS took delivery of its fi rst Anchor Handling Tug and Supply vessel (AHTS), MV Tanjung Huma and a Utility Vessel, MV Tanjung Manis

January 2006 TMS secured a long term contract from Petronas Carigali Sdn Bhd (PCSB) for the provision of maintenance services for mechanical rotating equipment at all offshore platforms operated by PCSB in East Malaysia for total contract value of RM80 million for a period of fi ve (5) years.

January 2006 A private placement of new ordinary shares of RM0.50 each of up to ten percent (10%) of the issued and paid-up share capital of Tanjung was completed. Tanjung completed the issuance of RM150 million serial bonds to fi nance the construction of MV Tanjung Pinang 1, MV Tanjung Pinang 2 and MV Tanjung Pinang 3.

July 2006 TKS took delivery of two (2) units of straight supply vessels, MV Tanjung Pinang 1 and MV Tanjung Pinang 2.

August 2006 The issuance of new shares and ten (10) year warrants 2006/2016 (“Warrants”) arising from the Bonus Issue on the basis of one (1) new ordinary share for every two (2) existing ordinary shares held were completed and listed on the Second Board of Bursa Securities.

8 September 2006 The listing and quotation of the entire enlarged issued and paid-up share capital and outstanding Warrants of Tanjung were transferred from the Second Board to the Main Board of Bursa Securities.

March 2007 TOS secured a contract from Murphy Sarawak Oil Co. Ltd. (“Murphy Oil”) for the provision of a jack-up drilling rig, namely “THE 208” for Murphy Oil’s 2007/2010 development drilling programmes in Malaysian waters.

CORPORATE HISTORY AND MILESTONES

IPO on Bursa Malaysia Delivery of fi rst AHTS vessel, MV Tanjung Huma

MOPU on location at Cendor fi eld The ‘208’ Jack up rig


March 2007 TKS took delivery of another two (2) units of straight supply vessels, MV Tanjung Pinang 3 and MV Tanjung Pinang 4.

July 2007 TOS secured a contract from Murphy Oil for the provision of a Self Elevating Relocatable Facility for the SK309/311 Phase One Gas Development Project for a duration of two (2) primary years.

August 2007 TKS took delivery of one (1) unit of AHTS, MV Tanjung Dawai

September 2007 TOS secured its fi rst well testing vessel contract from Carigali-PTTEPI Operating Company Sdn Bhd (CPOC).

October 2007 TOS secured its maiden contract from Truong San Joint Operating Company, Vietnam for the provision of a straight supply vessel, MV Tanjung Pinang 3.

December 2007 The Securities Commission approved the Issuance up to RM400.0 Million Nominal Value Islamic Medium Term Notes (“IMTN”) pursuant to an Islamic Medium Term Notes Programme (“IMTN Programme”) for purposes of fi nancing the acquisition and/or construction of offshore support vessels, production platforms, lift barges and oil rigs.

January 2008 PT. Tanjung Offshore Nusantara was incorporated as a subsidiary of Tanjung Offshore Berhad to provide integrated support services to the oil and gas and related industries in Indonesia.

July 2008 TKS took delivery of Tanjung’s eighth (8th) vessel, namely MV Tanjung Puteri 1, an AHTS vessel.

August 2008 Tanjung Offshore Berhad acquired the business and assets of Citech Limited and Citech Energy Systems Limited (“Citech Group”). The acquisition was completed via the incorporation of two new subsidiaries, namely Tanjung Citech UK Limited (TCUK) and Citech Energy Recovery Systems UK Limited (CERSUK). TCUK holds all patents and Intellectual Property Rights associated with the revolutionary “CiBAS Technology” in the manufacturing of Waste Heat Recovery Units (WHRUs) for the oil and gas and related industries. CERSUK is the operating subsidiary that will be manufacturing and marketing the WHRUs from Hull, United Kingdom.

September 2008 TKS took delivery of Tanjung’s ninth (9th) vessel, namely MV Tanjung Puteri 2, an AHTS vessel.

October 2008 Tanjung Offshore Berhad completed the renounceable Rights Issue with free new Warrants exercise that raised approximately RM62.0 million which will be utilised for future expansions in marine assets and offshore support vessels in the oil and gas industry.

December 2008 TKS took delivery of Tanjung’s tenth (10th) vessel, namely MV Tanjung Gaya, a Tug & Utility vessel.

January 2009 Tanjung Offshore Berhad acquired a 51% equity interest in Gas Generators (M) Sdn Berhad (GASTEC), which is principally involved in the manufacturing and marketing of gas generators in both the industrial and offshore oil and gas market.

February 2009 TOS launched Tanjung’s eleventh (11th) vessel, MV Tanjung Gelang, a well testing vessel which has been contracted to Carigali-PTTEPI Operating Company Sdn Bhd.

CORPORATE HISTORY AND MILESTONES

Delivery of MV Tanjung Puteri 2

MV Tanjung Gaya on sea trial Launch of MV Tanjung Gelang Waste heat recovery units assembled in Hull, UK


FIVE (5) YEARS GROUP FINANCIAL HIGHLIGHTS

2004 2005 2006 2007 2008 RM’000 RM’000 RM’000 RM’000 RM’000

Revenue 223,800 205,455 293,254 422,871 574,273

EBITDA 9,872 13,062 23,015 44,457 47,438

Net Profi t before tax 10,875 11,601 17,510 24,305 34,225

Net Profi t after tax 8,334 16,051 18,280 23,229 31,448

Pre -tax Margin 4.86 5.65 5.97 5.75 5.95

Net Margin 3.72 7.81 6.23 5.49 5.47

Net Earnings per share 22.88 26.6 13.12 11.49 14.63

Revenue (RM’000) Net Profi t After Tax (RM’000)

2004 2005 2006 2007 2008

500,000 —

550,000 —

600,000 —

450,000 —

300,000 —

400,000 —

350,000 —

250,000 —

0 —

200,000 —

2004 2005 2006 2007 2008

223,

800

205,

455

293,

254

422,

871

574,

273

25,000 —

30,000 —

35,000 —

15,000 —

20,000 —

10,000 —

5,000 —

0 —

8,33

4

16,0

51 18,2

80

23,2

29

31,4

48


37.42%214.83m

35.52%204.0m

12.75%73.25m

14.31%82.19m

40.42%171.0m

18.45%78.0m17.97%

76.0m

23.16%98.0m

0

0.5

1

1.5

2

2.5

3

3.5

Jan-08 Mar-08 Jun-08 Aug-08 Nov-08 Jan-09 Apr-09600

800

1000

1200

1400

1600Tanjung Offshore KLCI

Revenue Breakdown for the year ended 2008Revenue Breakdown for the year ended 2007Drilling and ProductionPlatform Services

Engineering EquipmentServices

Maintenance Services

Offshore Support VesselServices

Drilling and ProductionPlatform ServicesEngineering EquipmentServices

Maintenance ServicesOffshore Support VesselServices

Shareholders’ funds

2005 = 72,589,5742006 = 112,672,7152007 = 136,636,8812008 = 332,265,051

FIVE (5) YEARS GROUP FINANCIAL HIGHLIGHTS

Share price performance of Tanjung versus the KLCI between 1 Jan 2008 and 15 April 2009.

250

—

300

—

350

—

200

—

50

—

150

—

100

—

0

—

2005

(million)

72,589,574

2006 112,672,715

2007 136,636,881

2008 332,265,051


NOTICE IS HEREBY GIVEN THAT the Fifth Annual General Meeting of the Company will be held at Kenanga Room, Kelab Darul Ehsan, Taman Tun Abdul Razak, Jalan Kerja Air Lama, 68000 Ampang Jaya, Selangor Darul Ehsan on Tuesday, 26 May 2009 at 10:00 a.m. to transact the following businesses: -

AGENDA

1. To receive the Audited Financial Statements for the fi nancial year ended 31 December 2008 and the Reports of Directors and Auditors thereon.

2. To declare a fi nal dividend of 4% or RM0.02 sen per ordinary share of RM0.50 each less 25% income tax

for the fi nancial year ended 31 December 2008. 3. To approve the payment of Directors’ Fees. 4. To re-elect the following Directors retiring in accordance with Article 103 of the Company’s Articles of

Association:- (i) Senator Datuk Wira Syed Ali bin Tan Sri Syed Abbas Alhabshee (ii) Haji Omar bin Khalid 5. To re-elect Encik Za’aba bin Sedek retiring in accordance with Article 109 of the Company’s Articles of

Association. 6 To re-appoint Messrs. AljeffriDean as Auditors of the Company and authorise the Directors to determine

their remuneration. 7. As Special Business to consider and if thought fi t, to pass the following Ordinary Resolutions, with or

without modifi cations:- ORDINARY RESOLUTION I AUTHORITY TO ISSUE SHARES “THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby authorised

to issue shares in the Company at any time until the conclusion of the next Annual General Meeting and under such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fi t provided that the aggregate number of shares to be issued does not exceed 10 per centum of the issue share capital of the Company for the time being, subject always to the approval of all relevant regulatory bodies being obtained for such issue and allotment.”

ORDINARY RESOLUTION II PROPOSED RENEWAL OF SHARE BUY-BACK MANDATE

“THAT subject to the Companies Act, 1965 (“Act”), provisions of the Company’s Memorandum and Articles of Association and the requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) and any other relevant authorities, and other relevant approvals, the Directors of the Company be and are hereby authorised to purchase the Company’s ordinary shares of RM0.50 each (“Shares”) through Bursa Securities, subject to the following:-

(a) The maximum number of Shares which may be purchased by the Company shall not exceed ten per centum (10%) of the issued and paid-up ordinary share capital of the Company at any point in time;

(b) The maximum fund to be allocated by the Company for the purpose of purchasing its shares shall not exceed the retained profi ts and share premium accounts of the Company;

(c) The authority conferred by this resolution will be effective upon passing of this resolution and will continue in force until:-

Resolution 1

Resolution 2

Resolution 3

Resolution 4Resolution 5

Resolution 6

Resolution 7

Resolution 8

Resolution 9

NOTICE OF ANNUAL GENERAL MEETING


(i) the conclusion of the next Annual General Meeting (“AGM”) of the Company following the AGM, at which this resolution was passed, at which time the said authority will lapse, unless by an ordinary resolution passed at that meeting, the authority is renewed, either unconditionally or subject to conditions; or

(ii) the expiration of the period within which the next AGM of the Company after that date is required

to be held pursuant to Section 143(1) of the Act (but shall not extend to such extensions as may be allowed pursuant to Section 143(2) of the Act); or

(iii) revoked or varied by an ordinary resolution passed by the shareholders in a general meeting; whichever occurs fi rst;

(d) Upon completion of the purchase(s) of the Shares by the Company, the Shares shall be dealt with in the following manner:-

(i) cancel the Shares so purchased; (ii) retain the Shares so purchased as Treasury Shares; (iii) distribute the Treasury Shares as dividends to shareholders; (iv) resell the Treasury Shares on Bursa Securities in accordance with the relevant rules of Bursa

Securities; and (v) any combination of the above (i), (ii), (iii) and (iv).

THAT the Directors of the Company be and are hereby authorised to take all such steps and enter into all agreements, arrangements and guarantees with any party or parties as are necessary to implement, fi nalise and give full effect to the aforesaid purchase with full powers to assent to any conditions, modifi cations, revaluations, variations and/or amendments (if any) as may be imposed by the relevant authorities from time to time to implement or to effect the purchase of its own shares.”

ORDINARY RESOLUTION III PROPOSED ALLOCATION OF EMPLOYEES’ SHARE OPTION SCHEME (“ESOS”) OPTIONS TO

ZA’ABA BIN SEDEK, EXECUTIVE DIRECTOR OF THE COMPANY

“THAT the Board of Directors be and are hereby authorised specifi cally to offer and to grant Encik Za’aba Bin Sedek, an Executive Director of the Company, options to subscribe for up to a maximum of 600,000 new ordinary shares in the Company and allot and issue from time to time new ordinary shares pursuant to the acceptance of the offer and to the exercise of such options, subject always to any adjustments which may be made in accordance with the Bye-Laws governing and constituting the ESOS of the Company.”

8. To transact any other business of which due notice shall have been received.

NOTICE IS ALSO HEREBY GIVEN that the fi nal dividend of 4% or RM0.02 sen per ordinary share of RM0.50 each less 25% income tax in respect of fi nancial year ended 31 December 2008, if approved, will be paid on 2 June 2009. The entitlement date for dividend payment is on 26 May 2009.

A Depositor shall qualify for entitlement to the dividend only in respect of: -

a) Shares transferred to the Depositors’ Securities Account before 5.00 p.m. on 26 May 2009 in respect of transfers; and

b) Shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the rules of Bursa Malaysia Securities Berhad.

BY ORDER OF THE BOARD

SEOW FEI SANKANG SHEW MENGSecretaries

Petaling Jaya 30 April 2009


Resolution 10



NOTES:

1. A member entitled to attend and vote at the meeting shall not be entitled to appoint more than two (2) proxies to attend and vote in his/her stead. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply.

2. Where a member appoints two (2) proxies, the appointment shall be invalid unless he/she specifi es the proportions of his/her shareholding to be represented by each proxy.

3. Where a Member is an authorised nominee as defi ned under the Securities Industry (Central Depositories) Act, 1991, it may appoint at least one (1) proxy in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said Securities Account.

4. The instrument appointing a proxy shall be in writing under the hand of the appointer or of his/her attorney duly authorised in writing or, if the appointer is a corporation, either under its Common Seal or under the hand of its offi cer or attorney duly authorised.

5. The instrument appointing a proxy and the power of attorney or other authority (if any), under which it is signed or a notarially certifi ed copy thereof, must be deposited at the Registered Offi ce of the Company at 312, 3rd Floor, Block C, Kelana Square, 17 Jalan SS7/26, 47301 Petaling Jaya, Selangor Darul Ehsan not less than forty eight hours (48) hours before the time appointed for holding the Fourth Annual General Meeting or any adjournment thereof.

Explanatory notes on Special Business:

Resolution 8- Authority to Issue SharesThe proposed Resolution 8, if passed, is to give the Directors of the Company fl exibility to issue and allot shares for such purposes as the Directors in their absolute discretion consider to be in the interest of the Company, without having to convene a general meeting. This authority will expire at the next Annual General Meeting of the Company.

Ordinary Resolution 9 –Proposed Renewal of Share Buy Back MandateThe proposed Ordinary Resolution 9, if passed, will empower the Directors of the Company to continue to purchase the Company’s shares up to ten percent (10%) of the issued and paid-up share capital of the Company by utilizing the funds allocated which shall not exceed the total retained earnings and share premium account of the Company. Further information on the Proposed Renewal of the Share Buy-Back Mandate is set out in the Statement to Shareholders dated 30 April 2009, which is despatched together with Company’s Annual Report 2008.

Ordinary Resolution10 –Proposed Allocation of Employees’ Share Option Scheme Options (ESOS) to Za’aba bin Sedek, Executive Director of the CompanyThe proposed Ordinary Resolution 10, if passed, will empower the Directors of the Company to allocate ESOS to Encik Za’aba bin Sedek, an Executive Director of the Company.


STATEMENT ACCOMPANYING NOTICE OF THE FIFTH ANNUAL GENERAL MEETING

PURSUANT TO PARAGRAPH 8.28(2) OF THE LISTING REQUIREMENTS OF BURSA MALAYSIA SECURITIES BERHAD

Information on Directors standing for re-election:-

Name : Senator Datuk Wira Syed Ali bin Tan Sri Syed Abbas Alhabshee

Age : 47

Nationality : Malaysian

Qualifi cation/working experience and occupation :

Senator Datuk Wira Syed Ali bin Tan Sri Syed Abbas Alhabshee is the Independent Non-Executive Chairman of Tanjung Offshore Berhad (“Tanjung”). He was appointed to the Board of Directors of Tanjung on 9 March 2005. He was awarded a Professional Diploma in Leadership and Management by the New Zealand Institute of Management, New Zealand in 2003.

He ventured into business in the early 1980s and held directorships in several private and public corporations involved in a diverse range of businesses. He also holds directorships in IIUM Holdings Sdn Bhd, C.I. Holdings Berhad and UZMA Berhad. He is also the Chairman of Composites Technology Research Malaysia Sdn Bhd, a company which is controlled by the Ministry of Finance. Senator Datuk Wira Syed Ali was also appointed as a member of Dewan Negara (Senate) of Malaysia on 21 April 2003 and his tenure of offi ce has been renewed to April 2009. He is also the Chairman of Yayasan Pendidikan Cheras, Kuala Lumpur.

Senator Datuk Wira Syed Ali also serves as the Chairman of the Nomination Committee (“NC”) and Remuneration Committee (“RC”) as well as a member of the Audit Committee (“AC”) of Tanjung.

Position in the Company : Independent Non-Executive Chairman

Other directorship of public companies : C.I. Holdings Berhad UZMA Berhad

Interest in the Securities of the Company (as at 01.04.2009 ) : Number held (in ‘000) %

Ordinary Shares of RM0.50 each (Direct) 420,000 0.17 (Indirect) - -

Share Option under the

Employees’ Share Option Scheme - -

Interest in the Securities of the Subsidiaries of the Company (as at 27.02.2009) : None Family relationship with any Director and/or major shareholder of the Company : None

Any confl ict of interest with the Company : None

List of conviction for offences within the past 10 years other than traffi c offence : None


STATEMENT ACCOMPANYING NOTICE OF THE FIFTH ANNUAL GENERAL MEETING

PURSUANT TO PARAGRAPH 8.28(2) OF THE LISTING REQUIREMENTS OF BURSA MALAYSIA SECURITIES BERHAD

Information on Directors standing for re-election:-

Name : Haji Omar bin Khalid

Age : 54

Nationality : Malaysian

Qualifi cation/working experience and occupation :

Haji Omar bin Khalid is the Managing Director of Tanjung and he is one of the co-founders of Tanjung since its inception in 1990. He obtained a Diploma in Accountancy from Universiti Teknologi MARA and thereafter joined Arthur Young & Co. as an Auditor in 1975. He obtained a Bachelor of Business Administration (Finance) from Eastern Michigan University, USA in 1984. He later moved on to Kompleks Kewangan (M) Berhad where he was a Finance Manager until 1990.

Through the support of his associates in the oil and gas industry and his knowledge of the maritime industry, Haji Omar co-founded the Tanjung Group in early 1990. It also marks his successful venture into the Malaysian oil and gas support service industry. Through his experience and his commitment in the operations of the Group, he is able to maintain a close rapport with the suppliers/principals as well as having a sound understanding of the requirements and regulations set by the relevant authorities and PETRONAS.

Under his stewardship in the early 1990s, the Tanjung Group together with Odjfell Drilling & Consulting Co. secured the Group’s maiden drilling contract for exploratory and development of oilfi elds in East Malaysia. In mid 1990s, he assisted the Tanjung Group in procuring various exclusive agencies for a range of engineering equipment from principals worldwide which translated into larger contracts from the oil and gas majors. Since then, the Tanjung Group has grown organically from an agency based drilling company into an integrated service provider within the industry, focusing in the provision of engineering equipment, offshore support vessels, drilling and platform services and maintenance services in the region. Through his active and prudent leadership, the Tanjung Group has won numerous awards and accreditations for various safety and growth achievements. He led the Tanjung Group for an Initial Public Offering (IPO) which shares were successfully listed on Bursa Malaysia Securities Berhad on 27 May 2005.

Haji Omar is a trustee member of the Yayasan Pendidikan Cheras, Kuala Lumpur. He also serves as the Chairman of the Employees’ Share Option Scheme (“ESOS”) Committee and a member of the Remuneration Committee of Tanjung.

Position in the Company : Executive Director

Other directorship of public companies : None

Interest in the Securities of the Company (as at 01.04.2009) : Number held (in ‘000) %

Ordinary Shares of RM0.50 each (Direct) 102,190,422 41.84 (Indirect) 100,800 0.04 Share Option under the (Direct) 1,791,400 - Employees’ Share Option Scheme (Indirect) 67,000 Interest in the Securities of theSubsidiaries of the Company (as at 30.03.2007) : None

Family relationship with any Director and/or major shareholder of the Company : None

Any confl ict of interest with the Company : None

List of conviction for offences within the past 10 years other than traffi c offence : None


DIRECTORS’ PROFILE

A Malaysian, aged 47, is the Independent Non-Executive Chairman of Tanjung Offshore Berhad (“Tanjung”). He was appointed to

the Board of Directors of Tanjung on 9 March 2005. He was awarded a Professional Diploma in Leadership and Management by

the New Zealand Institute of Management, New Zealand in 2003.

He ventured into business in the early 1980s and held directorships in several private and public corporations involved in a diverse

range of businesses. He also holds directorships in IIUM Holdings Sdn Bhd, C.I. Holdings Berhad and UZMA Berhad. He is also

the Chairman of Composites Technology Research Malaysia Sdn Bhd, a company which is controlled by the Ministry of Finance.

Senator Datuk Wira Syed Ali was also appointed as a member of Dewan Negara (Senate) of Malaysia on 21 April 2003 till April

2009. He is also the Chairman of Yayasan Pendidikan Cheras, Kuala Lumpur.

Senator Datuk Wira Syed Ali also serves as the Chairman of the Nomination Committee (“NC”) and Remuneration Committee

(“RC”) as well as a member of the Audit Committee (“AC”) of Tanjung. He attended all the Board meetings which were held in the

fi nancial year ended 31 December 2008.

Senator Datuk Wira Syed Ali Bin Tan Sri Syed Abbas AlhabsheeIndependent Non-Executive Chairman



A Malaysian, aged 54, is the Managing Director of Tanjung and he is one of the co-founders of Tanjung since its inception in 1990. He obtained a Diploma in Accountancy from Universiti Teknologi MARA and thereafter joined Arthur Young & Co. as an Auditor in 1975. He obtained a Bachelor of Business Administration (Finance) from Eastern Michigan University, USA in 1984. He later moved on to Kompleks Kewangan (M) Berhad where he was a Finance Manager until 1990.

Through the support of his associates in the oil and gas industry and his knowledge of the maritime industry, Haji Omar co-founded the Tanjung Group in early 1990. It also marks his successful venture into the Malaysian oil and gas support service industry. Through his experience and his commitment in the operations of the Group, he is able to maintain a close rapport with the suppliers/principals as well as having a sound understanding of the requirements and regulations set by the relevant authorities and PETRONAS.

Under his stewardship in the early 1990s, the Tanjung Group together with Odjfell Drilling & Consulting Co. secured the Group’s maiden drilling contract for exploratory and development of oilfi elds in East Malaysia. In mid 1990s, he assisted the Tanjung Group in procuring various exclusive agencies for a range of engineering equipment from principals worldwide which translated into larger contracts from the oil and gas majors. Since then, the Tanjung Group has grown organically from an agency based drilling company into an integrated service provider within the industry, focusing in the provision of engineering equipment, offshore support vessels, drilling and platform services and maintenance services in the region. Through his active and prudent leadership, the Tanjung Group has won numerous awards and accreditations for various safety and growth achievements. He led the Tanjung Group for an Initial Public Offering (IPO) which shares were successfully listed on Bursa Malaysia Securities Berhad on 27 May 2005.

Haji Omar is a trustee member of the Yayasan Pendidikan Cheras, Kuala Lumpur. He also serves as the Chairman of the Employees’ Share Option Scheme (“ESOS”) Committee and a member of the RC of Tanjung. He attended all of the Board meetings which were held in the fi nancial year ended 31 December 2008.

Haji Omar Bin KhalidManaging Director



Haji Abdullah Bin HashimFinance Director

A Malaysian, aged 55, is the Finance Director of Tanjung and he is one of the co-founders of Tanjung since 1990. He holds a Bachelor in Accountancy from Universiti Teknologi MARA and a Post Graduate Diploma in Business Administration from University of Central Lancashire, United Kingdom. Haji Abdullah is a qualifi ed Chartered Accountant and is a member of the Malaysian Institute of Accountant since 1995. Haji Abdullah joined Arthur Young & Co. in 1977 and thereafter he assumed various senior fi nance positions at Lembaga Tabung Haji, Yayasan Pelajaran Mara and Rakyat Corporation Sdn Bhd before joining Bank Kerjasama Rakyat Malaysia in 1993. He was appointed as the Executive Director of Tanjung on 23 June 2005.

Haji Abdullah also serves as a member of the ESOS Committee of Tanjung. He attended all of the Board meetings which were held in the fi nancial year ended 31 December 2008.

Haji Hamidon Bin Md KhayonExecutive Director

A Malaysian, aged 40, is the Business Development Director of Tanjung and has been with Tanjung Group since 1995. He was appointed as Executive Director of Tanjung on 9 March 2005. He also sits on the Board of Directors of various subsidiaries within the Tanjung Group to oversee various project proposals and execution of contracts within the Group. He maintains a close rapport with the oil majors to propose new ideas and projects that meet the requirements and regulations of the industry.

Haji Hamidon started his career as a Drilling Fluid Engineer in 1993 with BW Promud Sdn Bhd, for area of operations predominantly in Malaysia. Later he joined Antah Baroid Sdn Bhd as a Drilling Fluids Specialist Sales and Services in 1994 for area operations within ASEAN countries. He joined Tanjung in April 1995 as a Project Sales Engineer to oversee marketing strategies and various projects and was subsequently promoted to lead the Business Development Section in 1997. He is a graduate from Colorado School of Mines, USA and holds a Bachelor Degree of Engineering in Petroleum Engineering. He is currently a member of Malaysia Oil and Gas Engineering Consultants.

Haji Hamidon also serves as a member of the ESOS Committee of Tanjung. He attended all of the Board meetings which were held in the fi nancial year ended 31 December 2008.

Za’aba Bin SedekExecutive Director

A Malaysian, aged 45, is the Director of Operations of Tanjung. He was appointed as Executive Director of Tanjung on 1 October 2008. He also sits on the Board of Directors of various subsidiaries within the Tanjung Group in overseeing overall operations and core business activities of Tanjung Group. He is also involved in the overall strategic planning of the direction of Tanjung Group as well as handling the day to day technical and commercial matters of various contracts within Tanjung Group.

He joined Tanjung in 1990 and assumed various positions within the Tanjung Group throughout the years. He is also an executive member of the Management Committee and the Chairman of the bi-annual Oil and Gas Asia exhibition team for Tanjung Group. He is also the management representative for Occupational, Health & Safety Assessment Series (OHSAS) and ISO 9001:2008 for Quality Management Systems implemented within the Tanjung Group.

He attended the only Board meeting held after his appointment as Director of the Company in the fi nancial year ended 31 December 2008.


Haji Ab Wahab Bin Haji IbrahimIndependent Non-Executive Director

A Malaysian, aged 57, is the Independent Non-Executive Director and Chairman of the Audit Committee of Tanjung. He was appointed to the Board of Directors of Tanjung on 9 March 2005. He is a Chartered Accountant and also a member of the Malaysian Institute of Accountants. He holds a Diploma and Advanced Diploma in Accounting from Universiti Teknologi MARA and his experience spans over 27 years in the area of fi nance and accounting. He began his career in the Corporate Finance Division at PETRONAS in 1978 and later assumed the role of Finance Manager for Petronas Gas Berhad (“PGB”), a subsidiary of PETRONAS. He was also appointed as Joint Company Secretary and was a member of the Management Committee for PGB. Following the successful implementation of the listing of Petronas Gas Berhad, he was further reassigned as Head of the Finance and IT Division of Oil, Gas and Petrochemical Technical Services Sdn Bhd, another subsidiary of PETRONAS in 1996, a position he held until 2004. Haji Abdul Wahab is also an Independent-Non Executive Director of Alam Maritim Resources Berhad and also serves as the Chairman of its audit committee.

Haji Ab Wahab also serves as the Chairman of the AC as well as a member of the NC and RC of Tanjung. He attended all of the Board meetings which were held in the fi nancial year ended 31 December 2008.

George William Warren JrIndependent Non-Executive Director

An American, aged 39, was appointed as Independent Non-Executive Director of Tanjung on 28 August 2007. He holds a Bachelor of Science Degree in Accounting (Graduating with Beta Alpha Psi Accounting Honours) from the Louisiana State University, United States. In 1993, after graduation, he joined Wegmann Dazet & Co., a professional corporation of certifi ed public accountants in New Orleans, Los Angeles, where he was both a Senior Auditor and a Forensic Auditor. In 1997, he was appointed as the Managing Director of BWB Controls, Inc., Los Angeles, a worldwide manufacturer of pneumatic, hydraulic and electric surface safety equipment engineered specifi cally for the oil and gas industry. In 2006, he became a Director in Mezco Fabrication, L.L.C., at Carencro, Los Angeles, a manufacturer of precision sheet metal parts utilising laser cutting technology for the oil and gas industry, a position he held until present day.

Mr Warren also serves as a member of the AC of Tanjung. He attended all the Board meetings which were held in the fi nancial year ended 31 December 2008.

Edwanee Cheah bin AbdullahIndependent Non-Executive Director

A Malaysian, aged 58, is the Independent Non-Executive Director of Tanjung. He was appointed to the Board of Directors of Tanjung on 9 March 2005. He holds a Masters in Business and Administration (Technology) from Deakin University and is a Member of the Association of Professional Engineers, Scientists and Managers, Australia. His strong technical background is complemented by a wide and diverse business experience. He has over 30 years of international experience in the energy sector and has served various business units of the Royal Dutch Shell Group (Shell Group) in Europe, USA, Africa, Middle East and Asia and has a good standing on the international projects community. Through his exposure and knowledge in energy sector he is now a professional in managing large oil and gas development projects and has successfully delivered several projects of value over USD1 billion. His area of expertise is in strategic planning, commercial deal making, and in leading large groups of technical and commercial resources. As of todate, he is still an active oil and gas consultant for the Shell Group, Sinopec Group and other multinational corporations.

Mr Edwanee also serves as a member of the AC, NC and RC of Tanjung. He attended all the Board meetings which were held in the fi nancial year ended 31 December 2008.

Confl ict of interestNone of the Directors has any confl ict of interest with the Company.

Conviction of OffenceNone of the Directors has been convicted of any offence within the past ten (10) years other than traffi c offences.



Continuous GrowthAs long as we continuously

innovate and strive to meet the

oil majors’ demands and requirements,

we believe that we can capitalise

on many opportunities

within the industry

for continuous growth

in the years to come


CHAIRMAN’S STATEMENT

Dear Shareholders,

On behalf of the Board of Directors of Tanjung Offshore Berhad (“Board”) (“Tanjung” or “Company”) and its subsidiaries (“Tanjung Group” or “Group”), I am pleased to report that the Group has chalked up another impressive year of performance for the fi nancial year ended (“FYE”) 31 December 2008 (“FYE 2008”) mainly due to our capital investments in recent years. I am pleased to present to our valued shareholders, Tanjung’s annual report and the audited fi nancial statements of Tanjung Group for the FYE 2008.

SENATOR DATUK WIRA SYED ALI BINTAN SRI SYED ABBAS ALHABSHEEIndependent Non-Executive Chairman


Financial Performance

For the FYE 2008, Tanjung’s fi nancial performance improved signifi cantly and registered a total revenue of RM574.27 million and profi t after taxation of RM31.45 million respectively. Overall revenue experienced an increase of 35.80% as compared to FYE 2007 which registered total revenue of RM422.87 million. During the fi nancial year under review, total profi t after taxation have also increased by 35% to RM31.45 million as compared to RM23.23 million in FYE 2007.

The increase in revenue and profi tability are mainly attributed by the Group’s ability to capitalise on niche markets within the oil and gas industry through the provision of offshore vessel services, engineering equipment sales, maintenance services as well as drilling and production platform services.

The improvement in the Group’s overall performance for FYE 2008 is attributed to growth in the provision of engineering equipment to new and existing offshore platforms such as water injection modules, gas turbines maintenance and spares, offshore switchgear packages and control valve packages.

In FYE 2008, the increase in revenue and profi tability levels were also attributed to an additional three (3) units of offshore support vessels namely MV Tanjung Puteri 1 (AHTS Vessel), MV Tanjung Puteri 2 (AHTS Vessel) and MV Tanjung Gaya (Tug & Utility Vessel) which were delivered in stages in FYE 2008. The capital investments in offshore support vessels due to the shortage of Malaysian fl agged vessels is beginning to bear fruit where the Group has benefi tted from higher charter rates and profi tability margins. The Group has recently launched its eleventh (11th) vessel, namely MV Tanjung Gelang (Well Testing Vessel) which will be deployed on long term charter to Carigali-PTTEPI Operating Company Sdn Bhd (CPOC).


Revenue (RM’000) Profi t After Tax (RM’000)

2004

223,

800

2005

205,

455

2006

293,

254

2007

422,

871

2008

574,

273

2004

8,33

4

2005

16,0

51

2006

18,2

80

2007

23,2

29

2008

31,4

48


THE “208” jack up drilling rig being towed upon completion of upgrading works.


Financial Performance (cont’d)

The Group’s overall revenue from maintenance services have also increased with contributions from all fi ve (5) operation centres/workshops in Kemaman Supply Base and Teluk Kalung (both in Terengganu), Miri, Bintulu and Labuan.

The drilling and production platform services have recorded signifi cant growth in revenue and profi tability with the commencement of the long term charter of Self Elevating Relocatable Unit (SERF) unit in April 2008 and “THE 208” jack-up drilling rig in the third quarter of 2008 respectively. The Mobile Offshore Production Unit (“MOPU”) is currently chartered on long term to Petrofac (Malaysia PM-304) Limited.

The improved contributions from our core business divisions in FYE 2008 together with corporate exercises undertaken during the year have resulted in stronger earnings and enhanced shareholders funds by more than 100% to RM322.26 million as at FYE 2008 as compared to RM136.64 million as at FYE 2007.

Oil and Gas Industry

We believe that the prevailing prices of global crude oil hovering at between USD40 to USD50 per barrel will still be economically viable for the oil majors to continue to spur exploration, development, production and maintenance activities within the industry, especially in the shallow-water development programmes. Notwithstanding the impact of volatility in oil prices, oil majors including our national oil company, PETRONAS, have maintained their production levels through a balanced offshore exploration and production activities in existing oil and gas fi elds.

Corporate Development

During the year under review, the Group has undertaken various corporate exercises to support and fi nance the Group’s expansion in the offshore oil and gas industry.

Apart from the existing RM400.0 Million Nominal Value Islamic Medium Term Notes (“IMTN”) Programme to fi nance the construction of offshore support vessels, the Group has successfully completed a Rights Issue with Warrants exercise in October 2008, which raised approximately RM63 million to part fi nance the Group’s capital investments in the marine services sector. Upon completion of this exercise, we have also strengthened our shareholders funds to support our capital investments to expand the existing fl eet size.

We have also implemented a share buyback programme which was approved by our shareholders in May 2008, to reduce any unwarranted volatility of Tanjung’s shares and assist to stabilize the supply, demand and price of Tanjung shares in the open market.

In recognition of our impressive growth track record in recent years, Tanjung was awarded the “Growth Excellence – Oil and Gas Services Market” in the Frost & Sullivan Industrial Technologies Award category. We have also been awarded various safety achievements such as “Contractor Safety Recognition Grand Award” from ExxonMobil Exploration and Production Malaysia Inc and Vessel of the Month Award for MV Tanjung Manis from “KSB Times”.


Datuk Wira Syed Ali launching extra curricular programmes for school children

Datuk Wira Syed Ali presenting awards to successful students


Outlook for 2009

The price of oil which has fallen from a high of USD147 per barrel to USD40 per barrel in the span of six (6) months has directly affected the prospective revenue forecasts of oil majors which may lead to delays for projects with higher cost structures. The current global recession and related credit crunch affecting the banking industry posed further fi nancing challenges to our future capital expansion.

Against this backdrop, we have adopted a more cautious and conservative approach to executing all contracts within the Group by continuously innovating so as to deliver our products and services within our core business in the most effective and effi cient manner. We have to actively penetrate new niche markets through new technologies, latest available information, regional networking and execution of strategic plans. Although we foresee a challenging period ahead, we remain optimistic and upbeat on the longer term and installing stronger fundamentals for Tanjung to further capitalise on windows of opportunities within the industry.

Corporate Social Responsibility

We have continuously implemented our corporate social responsibility programmes at Tanjung Group to promote:

• Awareness of Health, Safety and Environmental (HSE) performances;

• Development of Staff; and• Community Services.

We continuously eliminated potential risks of injury or hazards at our workplaces and offi ces through various seminars conducted by professionals to promote health, safety and development of our staff. Various HSE work ethics and processes are in place to ensure the safety of personnel at all levels of operations in our core business divisions. All HSE regulations and procedures have been communicated to all staff, business associates and visitors to our site offi ces as well as operation/maintenance centres. Various awards that we have received are testament of our continued commitment to HSE policies and practices.

As for staff development, we have organised various in-house training as well as technical courses for all our staff throughout the year. We believe in growing our own talent and continuously upgrading our talent pool of workforce. Our aim is to attract, train and retain the right people so that they have the ability and drive to deliver competitive advantage and superior competence.

We have also continuously supported various community services and activities at “Yayasan Pendidikan Cheras” which was established to support the education needs of children from low income groups in Kuala Lumpur. We have implemented various scholarships, incentives and support programmes to reward and support able students to further their studies at other higher institution of learning. We have also sponsored various practical training courses as part of the overall graduate programmes of local universities such as Universiti Teknologi Mara, International Islamic University Malaysia, Universiti Kuala Lumpur, Universiti Malaya, Universiti Utara Malaysia and Universiti Tenaga Nasional. These practical training programmes involved hands-on training at our maintenance workshops and formal seminars and discussions at our offi ces for various engineering disciplines within the oil and gas industry.



Blood donation campaign at our head offi ce New recruits at our new vessel, MV Tanjung Gaya

Corporate Social Responsibility (cont’d)

Through these practical training programmes, we are also able to offer employment to local graduates who have passed our formal selection criteria. We believe in supporting these programmes which will be provide mutual benefi ts to the career developments of local graduates and Tanjung Group on a long term basis.

Earlier this year, our Quality, Health, Safety and Environmental (QHSE) Department has successfully teamed up with the National Blood Centre of the Ministry of Health Malaysia to launch the “Blood Donation Campaign” which involved all employees of Tanjung based in Kuala Lumpur. We are proud to support such activities so as to further contribute back to the community.

Dividends

The Board has declared a fi nal dividend of 4% or RM0.02 per share of RM0.50 (less 25% taxation) for the fi nancial year ended 31 December 2008. The proposed fi nal dividend is subject to the approval of the shareholders of Tanjung at the forthcoming Annual General Meeting. The relevant payment date of the fi nal dividend will be announced in due course.

The Board has also declared an interim dividend of 8% or RM0.04 per share of RM0.50 (less 25% taxation) for the fi nancial year ending 31 December 2009. The said interim dividend has been paid on 8 April 2009.

Corporate Governance

The Board believes in the maintenance of the highest standards of corporate governance practices within the Group as a fundamental part of discharging our responsibilities to protect and maximize shareholders’ value and enhancing the continued business prosperity of the Group. The measures implemented have been highlighted in the Corporate Governance Report in this annual report.

Investor Relations

During the year, we have also organised various site visits at our workshops/operation centres and new vessel launches, analysts briefi ngs as well as participating in investor road shows. This is to establish proactive and timely communication linkages with the investment community such as institutional investors, fund managers, analysts and media on our fi nancial performance and business operations. Our Company’s website is also updated on a regular basis to refl ect the latest developments and improving public awareness of the Group at the same time.



Appreciation

On 1 October 2008, we welcomed En Za’aba bin Sedek in joining our Board as an Executive Director of Operations of Tanjung. Based on En Za’aba’s vast experience and familiarity in the oil and gas industry and handling of the overall operations of the Group, I believe he will contribute positively to the Group as we continue to create value for all our stakeholders in the near future.

On behalf of the Board, I wish to extend my gratitude and appreciation to our management and staff for their commitment and dedication in reinforcing our position as one of the leading oil and gas service providers in Malaysia. Their efforts coupled with their competencies have indeed resulted in the Group’s sterling performance.

We would also like to take this opportunity to thank our valued institutional and individual shareholders for your confi dence and believe in the prospects of the Group, the oil majors, in particular PETRONAS, which have been supporting us in their upstream and downstream operations over the years, our business associates and principals for the successful collaboration in various business operations, our bankers and government authorities for their vital role in our strategic planning and execution.

Lastly, my special thanks also to my colleagues on the Board of Tanjung for their invaluable support and guidance throughout the year.

.....................................................................SENATOR DATUK WIRA SYED ALI BIN TAN SRI SYED ABBAS ALHABSHEEIndependent Non-Executive Chairman21 April 2009

MOPU on location at Cendor fi eld


MANAGING DIRECTOR’S REVIEW

On behalf of the Board of Directors (“Board”) of Tanjung Offshore Berhad (“Tanjung” or “Company”) and its subsidiaries (“Tanjung Group” or “Group”), I am pleased that the Group has continued to perform very well for the fi nancial year ended (“FYE”) 31 December 2008 (“FYE 2008”). We have experienced growth in revenue and profi tability in all four (4) core business operations during the year under review.

During the FYE 2008, the Group registered total revenue of RM574.27 million which represented an increase of 35.80% as compared to that recorded in the previous FYE 2007 of RM422.87 million. Overall net profi t after tax for the Group in FYE 2008 have also increased by 35% to RM31.45 million as compared to RM23.23 million registered in FYE 2007. The signifi cant increases in revenue and profi tability levels were due largely to the Group’s continuous ability to penetrate niche markets within the oil and gas industry.

HAJI OMAR BIN KHALIDManaging Director


Engineering Equipment Services

In the engineering equipment division, we have continued to increase our market share through excellent technical collaboration with various principals. During the year under review, the Group registered an increase in the supply of engineering equipment to the oil majors.

Overall revenue for engineering equipment totalled RM204.0 million which represented an increase of 19% as compared to RM171 million registered in FYE 2007. The increase in revenue and profi tability in this division are mainly due to the completion and delivery of additional contracts secured such as glycol regeneration packages, waste heat recovery packages, produced water system packages, chemical injection, switchgear packages and nitrogen generators. Most of these contracts are secured from various oil majors operating in Malaysian waters operating at various stages of the life cycle of the production sharing contracts such as development, production, maintenance and rejuvenation of the oil and gas fi elds.


Industrial skid package



As part of our continuous effort to seek new niche markets within the oil and gas industry, we have acquired the business of manufacturing and marketing of waste heat recovery units (WHRU) in the United Kingdom. As part of the acquisition, Tanjung assumes all exclusive intellectual property rights and patent for the revolutionary “CIBAS Technology” used in the manufacturing of the WHRUs. The said patent and all intellectual property rights are held under a new subsidiary, Tanjung Citech UK Limited, while all operations which relates to manufacturing, marketing and distribution of the WHRUs are held under Citech Energy Recovery Systems UK Ltd. We wish to further penetrate this market through the setting up of new marketing offi ces in the United States, Europe and Asia Pacifi c. We also foresee that there will be robust demand for the WHRU due to greater emphasis on effi ciency and compliance to environmental regulations in the near future.

In widening our scope of products in the engineering equipment division, Tanjung has also acquired a 51% stake in Gas Generators (M) Sdn Bhd (Gastec). Gastec is principally involved in the manufacturing and distribution of gas generators for both industrial and offshore oil and gas industries.

The aforesaid acquisitions signify Tanjung’s commitment to move up the value chain so as to participate directly in the manufacturing, packaging and distribution of engineering equipment within the industry. In doing so, we are able to control the timeline for delivery of equipment and generating better profi tability margins in the long term.

Maintenance services

Tanjung Maintenance Services Sdn Bhd (TMS), a subsidiary of Tanjung provides complete maintenance services for a full range of engineering equipment in both the upstream and downstream sector of the oil and gas industry. Full maintenance services which involves general services and repair, overhaul and test for rotating equipment, fabrication of parts and machining, metal coating, rotor dynamic balancing, condition based monitoring and testing facilities for various types of engineering equipment. As of todate, TMS is operating from fi ve (5) main workshops of which two (2) are located in Kemaman, Terengganu, one (1) each in Miri, Bintulu and Labuan. We currently employ approximately 220 staff of various experiences and expertise. We also provide both in-house training and external training with our foreign based principals.

In FYE 2008, the Group registered a revenue of RM73.25 million as compared to RM78.50 million in FYE 2007 in the maintenance services division. We aim to increase our market share in this sector of the industry and have been networking with new and existing clients in both Peninsular and East Malaysia such as Petronas Dagangan Sdn Bhd, Petronas (Penapisan) Terengganu Sdn Bhd, Petronas Gas Berhad, BASF Petronas Chemicals Sdn Bhd, BP Chemical Sdn Bhd, ExxonMobil Exploration and Production Malaysia Inc, Bhd, Petlin Malaysia Sdn Bhd, Nippon Oil Exploration Malaysia Ltd and and Murphy Sarawak Oil Co.

Waste heat recovery units manufactured in Hull, UK Engineers performing maintenance services at our workshop



We are one of the few local service providers which have set up complete workshops in all the main oil and gas hubs in both Peninsular and East Malaysia. We have trained our human capital and invested in the latest technologies to enable us to move towards niche and knowledge based maintenance technologies. In doing so, we aim to be at the forefront of the total solutions provider concept for maintenance services in the Malaysia and the region.

Drilling and Production Platform Services

During the year under review, Tanjung in collaboration with our exclusive principal, Global Process Systems Sdn Bhd, have successfully launched the Self Elevating Relocatable Facility (“SERF”) in April 2008. The SERF has been chartered to Murphy Sarawak Oil Co. Ltd (Murphy Oil) for the SK309/311 Phase One Development Project for a duration of two (2) years.

In September 2008, we have also successfully launched the jack-up drilling rig, “THE 208” with Hercules Offshore Inc, which has since been deployed to location and currently chartered to Murphy Oil on long term contract.

Tanjung has also been operating the Mobile Offshore Production Unit (“MOPU”) at the Cendor oilfi eld for Petrofac (Malaysia PM-304) Limited on long term basis since 2006. The MOPU is currently being used for production of oil from Cendor fi eld, which has recorded its tenth (10th) million barrel of oil on 7 September 2008.

In FYE 2008, drilling and production platform services generated approximately RM214.83 million in revenue and it represented an increase of more than 100% as compared to RM98 million registered in FYE 2007. With the commencement of “THE 208” drilling unit and the SERF unit in FYE 2008, we expect revenue and profi tability levels for the Group for FYE 2009 to register signifi cant growth as these contracts are expected to contribute on a full year basis.

Offshore Support Vessels Services

During the FYE 2008, the offshore support vessels services division contributed a total revenue of RM82.19 million which represented an increase of 5.37% as compared to RM78 million recorded in FYE 2007. We have continued to embark on our capital expansion exercises to enhance our fl eet of offshore support vessels. In FYE 2008, the Group took delivery of additional three (3) units of offshore support vessels, MV Tanjung Puteri 1 and MV Tanjung Puteri 2 (both AHTS vessels) and MV Tanjung Gaya, a Tug and Utility vessel. In Feb 2009, the Group has also launched MV Tanjung Gelang, a well testing vessel specialising in well intervention operations to support the operations of Carigali -PTTEPI Operating Company Sdn Bhd (CPOC).

As of todate, the Group is operating eleven (11) wholly owned offshore support vessels which are chartered out to oil majors operating predominantly in Malaysian waters. Most of our vessels have secured long term charters up to FYE 2012 and we are confi dent that the demand for these vessels will remain

THE “208” jack up rig on location The “SERF” unit on location



Offshore Support Vessels Services (continued)

robust given the continuous development and production of new and existing shallow water development programmes for various oil and gas Production Sharing Contracts (PSCs), spearheaded by PETRONAS together with other oil majors operating in this region.

In the pipeline, we are expecting to take delivery of another fi ve (5) AHTS which are scheduled for completion and to be delivered in the next fi fteen (15) months. These AHTS vessels are built in local shipyards such as Muhibbah Marine Engineering Sdn Bhd, Grade One Marine Shipyard Sdn Bhd and Boustead Penang Shipyard Sdn Bhd. We hope to capitalise on the continuous robust demand for the offshore support vessels in this region and we anticipate that our revenue and profi tability from this division to continue to experience growth in the near future.

Our People

As of todate, the Group employs a total of 490 employees comprising senior management, corporate executives, professional engineers and marine offi cers at all levels of responsibilities within the Group. Apart from various capital investments in offshore support vessels, maintenance workshops/operation centres and other high end technology, the Group also invested substantially in human capital, which is also one of the important aspects of the Group. In line with our expansions and growth in business operations, we have

also recruited and provided various training programmes at all levels within the Group. During the year, we have sent various engineering teams for complete technical training for valves at Severn Glocorn Ltd and waste heat recovery units at Citech Energy Recovery Systems Ltd both in the United Kingdom. We have also sent our engineers for High Velocity Oxy Fuel (HVOF) training for specialized coating application for various types of machinery at Laserbond Ltd and attending factory acceptance tests for gas compression and power generation equipment at Enerfl ex Systems Ltd, both in Australia.

We have also sponsored various batches of students at Akademi Laut Malaysia (ALAM) where successful marine students are offered employment with Tanjung Group. Through these sponsorship programmes, we are able to attract local marine talents and providing a qualifi ed workforce for Tanjung Group’s future marine expansions.

Equipped with the latest technical knowledge and hands on experiences, our engineers of multiple disciplines would be able to offer their services to the oil majors, in the shortest time frame at their locations especially for urgent projects or during unforeseen emergencies.

MV Tanjung Gaya displaying its fi re fi ghting facilities New recruits from Akademi Laut Malaysia



Outlook for the Future

We are still upbeat on the prospects of both the upstream and downstream sectors of the oil and gas industry in Malaysia. Although crude oil prices have fallen from a high of USD147 per barrel in mid FYE 2008 to around USD40 per barrel, we remain positive on the long term opportunities within the industry based on our capital investments in recent years, in particular, the offshore support vessels and maintenance workshops. Despite the volatility in prices of oil, we are continuing with the aforesaid capital investments which are based on the long term fundamentals and requirements of the industry. At the same time, we have also enhanced our manpower expertise and capabilities through various staff training and development programmes.

Notwithstanding the volatility of oil prices, we believe that most oil majors including PETRONAS will continue to spur exploration, development, production and maintenance activities, especially in the shallow-waters where the overall cost structure is lower. Apart from that, most oil majors have also implemented various rejuvenation programmes to enhance the oil and gas recovery rates at existing and matured production sharing contracts (PSC). Based on these developments, we believe that there are various opportunities for Tanjung Group to participate in these support services. We have invested in our technical manpower, offshore support vessels and maintenance workshops that caters to a wide

MV Tanjung Dahan 1 under construction at Grade One Marine Shipyard Sdn Bhd

MV Tanjung Dahan 2 under construction at Grade One Marine

spectrum of the life cycle of the PSC on a long term basis. This is evident as we continue to grow rapidly in our core business divisions in recent years and registering higher revenue and profi tability levels.

We have to remain innovative and capitalise on our available resources to further enhance our product offerings and actively share new ideas with our existing and new business partners both locally and abroad. In doing so, Tanjung is able to propose new ideas with the latest technologies with better effi ciencies that translate into further optimisation of production at the lowest costs for the oil majors.

Overall, we foresee another fruitful year ahead for the Group on the back of foreseeable growth in demand for our integrated services. We have to continue to position ourselves and remain resilient in the midst of a global recession that has changed the general business environment drastically. We will remain focused in the oil and gas industry and maintain our relevance in becoming the preferred integrated oil and gas service provider in Malaysia and the region.

……………………………..HAJI OMAR BIN KHALIDManaging Director21 April 2009


It is the policy of Tanjung Offshore Berhad and its subsidiaries (Tanjung Group) that all our work activities shall be conducted in a manner which safeguards the Health, Safety and Welfare of all persons and preserves the natural Environment, as far as it is practicable.

Our Health, Safety and Environment (HSE) objectives shall bear equal importance with our fundamental business objectives.

Every employee of Tanjung Group is obligated to work safely, to cooperate and act responsibly in preventing injury to him/her and to others.

In pursuance of this policy and in adherence to all legislative and other requirements with the commitment to achieve continuous improvement, Tanjung Group shall endeavor to :-• Prevent all accidents, occupational diseases and fi res• Prevent damage to equipment, items, plant and property• Protect and preserve the environment• Implement safe system of work• Safeguards the interest of the general public and

surrounding community• Promote safety awareness and provide training to Tanjung

Group’s employees to achieve our HSE objectives• Provide forum and platform to employees, customers and

contractors to actively participate in our HSE programme

HEALTH, SAFETY& ENVIRONMENT

POLICY



AUDIT COMMITTEE REPORT

The primary objective of the Audit Committee is to assist the Board of Directors in discharging its statutory duties and responsibilities relating to accounting and reporting practices and to ensure the adequacy and effectiveness of the Group’s internal control measures.

COMPOSITION OF THE AUDIT COMMITTEE

The members of the Audit Committee and their respective designations who have served during the fi nancial year ended 31 December 2008 are as follows:-

Member DesignationHaji Ab Wahab bin Haji Ibrahim Chairman (Independent Non-Executive Director)Senator Datuk Wira Syed Ali Bin Tan Sri Syed Abbas Alhabshee Member (Independent Non-Executive Chairman)Edwanee Cheah Bin Abdullah Member (Independent Non-Executive Director)George William Warren Jr Member (Independent Non-Executive Director)

TERMS OF REFERENCE

• Membership The Committee shall be appointed by the Directors from among them and shall consist of not less than three (3) in numbers

of whom a majority shall not be:-

(a) Executive Directors of the Company or any relevant corporation. (b) Spouse, parent, brother, sister, son or adopted son, daughter or adopted daughter of an executive director of the

Company or of any related corporation; or (c) Spouse of brother, sister, son or adopted son, daughter or adopted daughter of an executive director or of any related

corporation, or (d) Any person having a relationship which, in the opinion of the Board of Directors, would interfere with the exercise of the

independent judgement in carrying out the functions of the committee.

The members of the Committee shall elect a Chairman from among their number who is not an executive director or employee of the Company or any related corporation. If a member of the Committee resigns, dies or for any other reason ceases to be a member with the result that the number of members is reduced to two (2), the Board of Directors shall within three (3) months of that event, appoint such number of new members as may be required to make up the minimum number of three (3) members.

• Authority The Committee is authorised by the Board to investigate any activity within its terms of reference. It is authorised to seek

any information it requires from any employees and all employees are directed to co-operate with any request made by the Committee. The Committee shall also have the authority to consult independent experts where they consider it necessary to carry out their duties.

• Meetings The Committee shall meet at least four (4) times a year and such meetings as the Chairman shall decide in order to fulfi l its

duties. The Secretary of the Committee shall be responsible, in conjunction with the Chairman, for drawing up the agenda and circulating to the Committee prior to each meeting. The Secretary will also be responsible for keeping the minutes of the meetings of the Committee, and circulating them to committee members and to other members of the Board of Directors.

• Quorum The quorum for an Audit Committee meeting shall consist of two (2) members and a majority of the members present shall

be independent directors.

• Functions The following are the main functions of the Audit Committee collectively:- 1. Review the audit plan with the external auditors; 2. Review with the external auditors his evaluation of the system of internal controls; 3. Review the audit report with the external auditors; 4. Review the assistance given by the company’s offi cer to the auditors; 5. Review the scope and result of the internal procedures; 6. Review the balance sheet and profi t and loss account; 7. Review any related party transactions that may arise within the Company or the Group; 8. To consider the nomination of a person or person as auditors; and 9. To perform any other work that is required or empowered to do so by statutory legialation or guidelines as prepared by

the relevant Government authorities.


During the fi nancial year ended 31 December 2008, the Audit Committee held a total of four (4) meetings, the details of attendance of which are as follows:-

Member No. of meetings attended Haji Ab Wahab bin Haji Ibrahim 4 of 4 Senator Datuk Wira Syed Ali Bin Tan Sri Syed Abbas Alhabshee 4 of 4 Edwanee Cheah Bin Abdullah 4 of 4 George William Warren Jr* 1 of 4 Haji Omar bin Khalid** 1 of 4

*Appointed to the Audit Committee on 22 August 2008 ** Resigned from the Audit Committee on 22 February 2008

SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE

During the fi nancial year ended 31 December 2008, the activities of the Audit Committee included the following:-

• Reviewed of the external auditors’ scope of work and their audit plan.• Reviewed with the external auditors on the results of their audit, the audit report and internal control recommendations in

respect of improvements in internal control procedures noted in the course of their audit.• Reviewed and approved the internal audit and controls plan presented by the external auditors.• Reviewed the annual report and the audited fi nancial statements of the Company and the Group prior to submission to the

Board for their consideration and approval. The review was to ensure that the audited fi nancial statements were drawn up in accordance with the provisions of the Companies Act, 1965 and the applicable approved accounting standards issued by the Malaysian Accounting Standards Board (“MASB”).

• Reviewed the Company’s compliance with the Listing Requirements of the Bursa Malaysia Securities Berhad (“Bursa Securities”) and the applicable approved accounting standards issued by MASB.

• Reviewed of the quarterly unaudited fi nancial statements and its explanatory notes thereon and recommending to the Board for Directors’ approval.

• Reviewed of the Company’s status of compliance with the Malaysian Code on Corporate Governance for the purpose of issuing of a Corporate Governance Statement pursuant to the requirement of paragraph 15.26 of the Listing Requirements of Bursa Securities.

• Reviewed the Group’s key operational and business risks area and the policies in place to address and minimize such risks.

• Reviewed the allocation of options during the year under the Company’s Employees’ Share Option Scheme (“ESOS”) to ensure this was in compliance with the allocation criteria determined by the ESOS Committee and in accordance with the Bye-Laws of the ESOS.

• Met with the external auditors in the absence of the Executive Directors and Senior Management.

INTERNAL AUDIT FUNCTION

The Audit Committee is aware of the importance of independent and adequately resourced internal audit function for the effectiveness of internal control system. The principal responsibilities of the internal audit function are as follows:-

• Evaluate the effectiveness of the internal control systems so as to provide reasonable assurance that such systems continue to operate in compliance with the existing control and risk assurance systems effectively.

• Review, appraise and to ensure compliance with the Group’s established policies and procedures as well as the relevant statutory requirements.

• Highlight major weakness in control procedures and make recommendation for improvements to the Audit Committee.

The internal audit function of the Group adopts a risk based approach to monitor and implement an effective internal control system for the Group. The monitoring process forms the basis for continuous improvement to the risk management process of the Group in meeting its overall objectives. At the present moment, the Company’s internal audit function is outsourced to an Internal Audit fi rm.

AUDIT COMMITTEE REPORT


STATEMENT ON INTERNAL CONTROL

Introduction

Paragraph 15.27(b) of Listing Requirements of Bursa Securities Malaysia Berhad (“Bursa Securities”) requires the Board of Directors of public listed companies to include a statement in the Annual Report on the state of internal controls in the Company as a Group. The Board is pleased to provide the following statement on internal control of the Group for the fi nancial year under review prepared in accordance with the “Statement on Internal Control - Guidance for Directors of Public Listed Companies” issued by the Institute of Internal Auditors Malaysia and adopted by Bursa Securities.

Board Responsibilities

The Board of Directors recognises the importance of sound internal controls and risk management practices in the maintenance of good corporate governance. The system of internal control is designed to identify and manage the principal risks facing the Group in pursuit of its objectives. The system covers control relating to fi nancial, operational, risk management and compliance with applicable rules and regulations.

The responsibilities of the Board in relation to the system extend to all subsidiaries of the Group. In view of the limitations inherent in any system of internal control, the Group’s system of internal control can only manage rather than eliminate the risk of failure to achieve corporate objectives and therefore can only provide reasonable and not absolute assurance against material misstatement, loss and fraud.

The Group continues to take measures of the adequacy and integrity of the system of internal control. The ongoing process of identifi cation, evaluation and management of signifi cant risk has been in place during the fi nancial year under review. This process is reviewed on a regular basis by the Audit Committee and the Board of Directors. The key features of the internal control system are outlined below.

Systems of Internal Control

The Group maintains a system of internal control that serves to safeguard its assets; identify and manage risk; ensure compliance with statutory and regulatory requirements; and to ensure operational results are closely monitored and substantial variances are promptly explained.

The salient features of the Group’s system of internal control include, inter alia :-

• An organisational structure with clearly defi ned lines of responsibility and relevant authority has been set up for the Group. • The Group’s management with the assistance of a centralised human resource function sets the policies for recruitment,

training and appraisal of the employees within the Group. • Policies and procedures which sets out the compliance standards for daily operations for the respective business units of

the Group; • The Board of Directors evaluates risks involved and seeks appropriate experts’ advice in considering business proposals and

operational issues so as to make an effective decision in the best interest of the Group. • The Group’s management sets clearly defi ned authorisation procedures which are clearly documented and implemented so

as to exercise strict control on compliance therewith by all levels of employees. • The Group’s management meets monthly to review the operational and fi nancial performance of the businesses in the Group

and its subsidiaries, and to discuss key business, operational and management issues. • The Board of Directors receives and reviews quarterly performance reports on the Group and its subsidiaries from the

management, and discuss on signifi cant business and risk issues. • The Group’s management and internal auditors have conducted reviews on the system of internal control to ensure compliance

with the established policies and procedures of the Group. Weaknesses are properly communicated to management and prompt corrective actions have been taken.

• Established system of performance appraisal to monitor and maintain good performance standards from employees.

Conclusion

The Board is of the view that the system of internal control that had been implemented within the Group is sound and effective. The internal control procedures will be reviewed continuously in order to improve and strengthen the system to ensure ongoing adequacy, integrity and effectiveness so as to safeguard the Group’s assets and shareholders’ investments.

This statement is made in accordance with a resolution of the Board of Directors dated 21 April 2009.


STATEMENT OF CORPORATE GOVERNANCE

The Board of Directors (“the Board”) recognises the importance of good corporate governance and is committed to the establishment and implementation of a proper framework and controls that are in line with the principles and best practices as recommended by the Malaysian Code of Corporate Governance (“the Code”).

The Board will continuously evaluate the status of the Group’s corporate governance practices and procedures with a view to adopt and implement the Best Practices of the Code wherever applicable in the best interests of the shareholders of the Company. The Board has generally applied the Principles and Best Practices of the Code.

The Board is pleased to report herein the manner in which the Company has applied the Principles of the Code and the extent to which it has complied with the Best Practices of the Code.

DIRECTORS

1. Board Responsibilities

The Board is fully aware of its role and has adopted the specifi c responsibilities that are listed in the Code, which facilitates the discharge of the Board’s stewardship responsibilities.

a. Board Balance

The Board of Directors consists of eight (8) members comprising four (4) executive directors, and four (4) non-executive directors. Four of the eight Directors are independent Directors. The Board has complied with Paragraph 15.02 of the Listing Requirements of Bursa Malaysia Securities Berhad that at least two or one-third of the Board, whichever is the higher is independent directors. The Board considers its current size adequate given the existing scope and nature of the Group’s business operations.

The Board is responsible for implementing the policies and decisions of the Board, overseeing the operations and developing the business and corporate strategies of the Group. The Board also monitors the performance of the Group and ensures that a proper internal control system is in place. The presence of independent non-executive directors is to provide independent and unbiased views of fi nancial and business inputs for the interest of the Group.

b. Board Committees

The Board has established board committees to assist the Board in discharging their duties. These committees are as follows:-

• Audit Committee • Nomination Committee • Remuneration Committee • ESOS Committee

Audit Committee

The composition of the Audit Committee is in compliance with relevant regulatory requirements. The report of the Audit Committee is on pages 50 to 51.

Nomination Committee

The Nomination Committee is responsible for reviewing the Board composition and balance as well as considering the Board’s succession planning, making recommendation for new appointment of Directors. The Nomination Committee meets as and when required. The decision on new appointment shall be the responsibility of the Board after considering the recommendation of the Nomination Committee.


The members of the Nomination Committee are as follows:-

Member Designation Senator Datuk Wira Syed Ali Bin Tan Sri Syed Abbas Alhabshee Chairman (Independent Non-Executive Chairman) Haji Ab Wahab bin Haji Ibrahim Member (Independent Non-Executive Director) Edwanee Cheah Bin Abdullah Member (Independent Non-Executive Director)

The Board considers that the current mix of skills and experience of its members is suffi cient for the discharge of its duties and responsibilities effectively.

Remuneration Committee

The Remuneration Committee recommends to the Board the levels and elements of remuneration of Directors with executive functions and the senior management. The Board as a whole determines the allowances of the Non-Executive Directors and the Non-Executive Chairman after considering the recommendation of Remuneration Committee. The Remuneration Committee meets as and when required.

The members of Remuneration Committee are as follows:-

Member Designation Senator Datuk Wira Syed Ali Bin Tan Sri Syed Abbas Alhabshee Chairman (Independent Non-Executive Chairman) Haji Omar Bin Khalid Member (Managing Director) Haji Ab Wahab bin Haji Ibrahim Member (Independent Non-Executive Director) Edwanee Cheah Bin Abdullah Member (Independent Non-Executive Director)

Employees Share Option Scheme (“ESOS”) Committee

The ESOS Committee was established on 2 August 2005. The ESOS Committee comprises two (2) Executive Directors and the Managing Director. The members of the ESOS Committee are :-

Haji Omar Bin Khalid Chairman (Managing Director) Haji Abdullah bin Hashim Member (Executive Director) Haji Hamidon bin Md Khayon Member (Executive Director)

The ESOS Committee shall be vested with such powers and duties as are conferred upon it by the Board including the powers:-

• to administer the ESOS and to grant Options in accordance with the Bye-Laws;

• to recommend to the Board to establish, amend, and revoke Bye-Laws, rules and regulations to facilitate the implementation of the Scheme;

• to construe and interpret the provisions hereof in the best interest of the Company; and

• generally, to exercise such powers and perform such acts as are deemed necessary or expedient to promote the best interest of the Company.




Subject to the foregoing, the ESOS Committee shall exercise its discretion in such manner as it deems fi t.

As at the fi nancial year ended 31 December 2008, a total of 14,691,000 ESOS options allocated to the employees of the Group remains unexercised. None of the allocation of ESOS options was made available to the Non-Executive Directors of the Group.

During the fi nancial year under review, fi ve (5) Board Meetings were held and the Directors’ attendances at the Board Meetings were as follows:-

Attendance

Senator Datuk Wira Syed Ali Bin Tan Sri Syed Abbas Alhabshee 5/5 (Chairman, Non-Independent Non-Executive Director)

Haji Omar Bin Khalid 5/5 (Managing Director)

Haji Abdullah Bin Hashim 5/5 (Executive Director)

Haji Hamidon Bin Md Khayon 5/5 (Executive Director)

Za’aba bin Sedek* 1/5 (Executive Director)

Haji Wahab bin Ibrahim 5/5 (Independent Non-Executive Director)

Edwanee Cheah Bin Abdullah 5/5 (Independent Non-Executive Director)

George William Warren Jr. 5/5 (Independent Non-Executive Director)

*Appointed to the Board on 1 October 2008

Supply of Information

The Board recognises that the decision making process is highly dependent on the quality of information furnished. As such, the Board members have full and unrestricted access to all information concerning the Group’s affairs. Prior to the Board meetings, all Board members are provided with the agenda and board papers containing information relevant to the business of the meeting to enable them to obtain further explanations, where necessary, in order to be properly briefed before the meetings. The Board papers including information on major fi nancial, operational and corporate matters of the Group. The Board members also have access to the advice and services of the Company Secretary, senior management and independent professional advisers including the external auditors.

Appointment and Re-election

In accordance with Article 103 of the Company’s Articles of Association, at least one-third of the Directors for the time being shall retire from offi ce and be subject to retirement by rotation at each Annual General Meeting (“AGM”). The article also provides that all Directors shall retire once in every three (3) years in compliance with the Code. Directors who are appointed before the next AGM will retire and be subject to re-election by shareholders at the next AGM.



Directors’ Training

All Directors have attended and successfully completed the Mandatory Accreditation Programme conducted by Bursatra Sdn Bhd within the stipulated timeframe required in the Listing Requirements of Bursa Securities. The Board of Directors are mindful that they should receive appropriate continuous training and during the fi nancial year, they have attended presentations and briefi ngs in order to keep abreast with developments in the industry, market place and with new statutory and regulatory requirements.The courses and/or briefi ngs attended by the Executive Directors include the following:-- Finance for Non Finance Executives;- Dividends and The Single Tier Tax System;- Health, Safety and Environment policies in the offi ce and operation centres; and- Fire drill briefi ngs by external consultants.

DIRECTORS’ REMUNERATION

The determination of remuneration packages of the Directors are matters for the Board as a whole. The remuneration of the Directors is structured to attract, retain and motivate them in order to run the Group successfully.

The Board reviews the remuneration of the Directors annually whereby the respective Executive Directors are abstained from discussions and decisions on their own remuneration.

The aggregate remuneration of the Directors for the fi nancial year ended 31 December 2008 is as follows :-

Executive Directors Non-Executive Directors Total (RM)Basic salary 924,000 - 924,000Bonuses 77,000 - 77,000Fees - 60,000 60,000Total 1,001,000 60,000 1,061,000

Remuneration Band (RM) Executive Directors Non-Executive Directors0 - 50,000 - 450,001 - 100,000 - -100,001 - 150,000 2 -150,001 – 200,000 1 -200,001 – 250,000 1 -

RELATIONSHIP WITH SHAREHOLDERS

The Group recognises the importance of effective communication with its shareholders and investors to keep them informed of the major development of the group. Such information is disseminated through the following channels :-

• Annual Report;• Circulars to shareholders;• Various disclosures and announcement to Bursa Securities; and• Company’s website at www.tanjungoffshore.com

The main forum for dialogue with shareholders remains at the Annual General Meeting which encouraged the shareholders to raise questions pertaining to the operations and fi nancials of the Group.



ACCOUNTABILITY AND AUDIT

1. Financial Reporting The Board is responsible to present a balanced, clear and comprehensive assessment of the Group’s fi nancial performance

and prospects through the quarterly and annual fi nancial statements to shareholders. The Board and the Audit Committee have to ensure that the fi nancial statements are drawn up in accordance with the provisions of the Companies Act, 1965 and applicable approved accounting standards in Malaysia. In presenting the fi nancial statements, the Board has reviewed and ensuring that appropriate accounting policies have been used, consistently applied and supported by reasonable judgments and estimates.

2. Internal Control The Board has overall responsibility for maintaining a sound and effective system of internal control of the Group, covering not

only fi nancial controls but also controls relating to operations, compliance and risk management to safeguard shareholders investments and the Group’s assets. The Board also recognises that the system of internal control has inherent limitations and is aware that such a system can only provide reasonable and not absolute assurance against material misstatements, loss or fraud.

The internal control system of the Group is supported by an established organisational structure with well-defi ned authority

and responsibility lines, and which comprises of appropriate fi nancial, operational and compliance controls. 3. Relationship with Auditors The Board, via the Audit Committee, has established a formal and transparent arrangement for maintaining an appropriate

relationship with its auditors, both external and internal. 4. Statement of Directors’ Responsibility The Directors are required by the Companies Act, 1965 to prepare fi nancial statements for each fi nancial year, which give a

true and fair view of the state of affairs of the Group and the Company and of the results and cash fl ow of the Group and the Company for the fi nancial year then ended.

In preparing the fi nancial statements for the FYE 2008, the Directors have:- • adopted the appropriate accounting policies and applied them consistently; • made judgments and estimates that are reasonable and prudent; • ensure applicable approved accounting standards have been followed, and any material departures have been disclosed

and explained in the fi nancial statements; and • ensure the fi nancial statements have been prepared on a going concern basis.

The Directors are responsible for keeping proper accounting records of the Group and Company, which disclose with reasonable accuracy the fi nancial position of the Group and the Company, and which will enable them to ensure the fi nancial statements have complied with the provisions of the Companies Act, 1965 and the applicable approved accounting standards in Malaysia.

The Directors have the general responsibility for taking such steps as are reasonably open to them to safeguard the assets

of the Group and to prevent and detect fraud and other irregularities. 5. Compliance Statement Throughout the FYE 2008, the Group has complied with all the Best Practices of Corporate Governance set out in Part 2 of

the Malaysian Code on Corporate Governance.


OTHER DISCLOSURE REQUIREMENTS

a) Share Buy-backs The Company had on 15 April 2008 announced the share buy-back exercise to purchase its own ordinary shares of RM0.50

each of up to 10% of the issued and paid up share capital of Tanjung. The share buy-back exercise was approved by the shareholders of Tanjung on 23 May 2008.

The breakdown of purchases made under the share buy-back exercise during the year is as follows:-

Month No of shares Highest Lowest Average Total purchased price paid price paid price paid consideration (RM) (RM) (RM) paid (RM)

July 24,900 2.10 1.91 1.98 49,390 August 580,700 2.03 1.83 1.94 1,126,401 September 1,792,200 1.75 1.42 1.74 3,111,313 October 26,700 1.49 0.99 1.14 30,561 November - - - - - December 500 0.99 0.99 0.99 495 As at 31 December 2008 2,425,000 4,318,160

As at 31 December 2008, all the purchased shares were retained as Treasury shares and there was no resale or cancellation of these purchased shares.

b) Options, Warrants or Convertible Securities The details of the movement of ESOS Options for the fi nancial year ended 31 December 2008 are as follows:-

No of ESOS Options ESOS Options ESOS Options No of ESOS Options granted as at Exercised Cancelled outstanding as at 31 Dec 2008 31 Dec 2008

20,754,890 5,111,090 952,800 14,691,000 The abovementioned ESOS Scheme will expire on 1 August 2010.

As at 31 December 2008, the number of outstanding Warrants are as follows:-

Conversion price Outstanding as at Expiry Date 31 Dec 2008 Warrants A RM0.55 35,901,972 7 July 2016

Warrants B RM1.20 40,977,929 11 October 2013


c) American Depository Receipt (“ADR”) or Global Depository Receipt (“GDR”) Programme.

During the fi nancial year under review, the Company did not sponsor any ADR or GDR Programme. d) Imposition of Sanctions/Penalties

There were no public sanctions and/or penalties imposed on the Company or its subsidiaries, Directors or management by the relevant regulatory bodies during the fi nancial year under review.

e) Non-Audit Fees

There were no non-audit fees paid to the external auditors during the fi nancial year under review. f) Variation in Results

There was no material variation between the audited results for the fi nancial year ended 2008 and the unaudited results previously announced.

g) Material Contracts

To the best of the Board’s knowledge, there are no material contracts involving the Group with any of the major shareholders or Directors in offi ce during the year under review.

h) Contracts Relating to Loans

No contract relating to loans was executed by the Company during the year under review. i) Revaluation of Landed Properties

No revaluation was performed on any of the Group’s landed properties during the year under review. j) Profi t guarantees

No profi t guarantees were provided by the Company or its subsidiaries during the year under review.

k) Recurrent Related Party Transactions (“RRPT”)

No RRPT were transacted during the year under review.

OTHER DISCLOSURE REQUIREMENTS

61 Directors’ report

68 Statement by Directors

69 Statutory declaration

70 Report of the auditors

72 Balance sheet

73 Income statement

74 Statement of changes in equity

76 Cash fl ow statement

78 Notes to the fi nancial statements

Financial Statements


DIRECTORS’ REPORTFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2008

The directors are pleased to submit their report and the audited fi nancial statements of Tanjung Offshore Berhad (“Tanjung” or “Company”) and its subsidiaries (“Tanjung Group” or “Group”) for the fi nancial year ended 31 December 2008.

PRINCIPAL ACTIVITIES

The Company is principally engaged in investment holding. The principal activities of the subsidiaries and associated company are set out in Notes 7 and 8 to the fi nancial statements respectively. There have been no signifi cant changes in the nature of these principal activities of the Group and of the Company during the current fi nancial year.

RESULTS

GROUP COMPANY RM RM Net profi t for the year 31,448,428 4,889,253

RESERVES AND PROVISIONS

All material transfer to or from reserves and provisions during the current fi nancial year have been disclosed in the statement of changes in equity.

DIVIDEND

At the Annual General Meeting held on 23 May 2008, a fi nal dividend of 6% or RM0.03 per ordinary share of RM0.50 less 26% income tax for the fi nancial year ended 31 December 2007 was proposed and approved by the shareholders. The said fi nal dividend was subsequently paid on 09 June 2008 amounting to RM4,540,500.

On 23 February 2009, a fi nal dividend of 4% or RM0.02 per ordinary share of RM0.50 less 25% income tax for the fi nancial year ended 31 December 2008 has been proposed by the Company. The aforesaid proposed fi nal dividend is subject to the approval of the shareholders at the forthcoming Annual General Meeting of the Company which will be held on 26 May 2009. These fi nancial statements do not refl ect the aforesaid fi nal dividend, which has been accrued as a liability in the fi nancial year ending 31 December 2009 and subject to the approval by the shareholders of the Company.

TREASURY SHARES

During the current fi nancial year, the Company purchased 2,428,300 of its issued ordinary shares from the open market at an average price of RM1.78 per share. The total consideration paid for the purchase was RM4,350,641 including transaction costs. The shares purchased are being held as treasury shares in accordance with Section 67A of the Companies Act, 1965.

BAD AND DOUBTFUL DEBTS

Before the income statement and the balance sheet of the Group and of the Company were made out, the directors took reasonable steps to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and satisfi ed themselves that there were no known bad debts had been written off and that no provision for doubtful debts was necessary.

At the date of this report, the directors are not aware of any circumstances which would render it necessary to write off any bad debts or to make any provision for doubtful debts in respect of the fi nancial statements of the Group and of the Company.


ITEMS OF A MATERIAL AND UNUSUAL NATURE

The results of the operations of the Group and of the Company for the fi nancial year ended 31 December 2008 were not, in the opinion of the directors, substantially affected by any item, transaction or event of a material and unusual nature.

There has not arisen in the interval between the end of the fi nancial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors, to affect substantially the results of the operations of the Group and of the Company for the current fi nancial year.

CURRENT ASSETS Before the balance sheet of the Group and of the Company were made out, the directors have taken reasonable steps to ensure that any current assets which were unlikely to realise in the ordinary course of business their values as shown in the accounting records of the Group and of the Company had been written down to an amount which they might be expected so to realise.

At the date of this report, the directors are not aware of any circumstances that would render the values attributed to the current assets in the fi nancial statements of the Group and of the Company misleading.

VALUATION OF ASSETS AND LIABILITIES

As at the date of this report, the directors are not aware of any circumstances, which have arisen which render adherence to the existing methods of valuation of assets and liabilities of the Group and of the Company misleading or inappropriate.

CONTINGENT AND OTHER LIABILITIES

At the date of this report, there does not exist:

i) any charge on the assets of the Company which has arisen since the end of the fi nancial year which secures the liabilities of any other person; or

ii) any contingent liabilities in respect of the Company which has arisen since the end of the fi nancial year, other than as disclosed in Note 31 to the fi nancial statements.

No contingent or other liabilities has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the fi nancial year which, in the opinion of the directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due.

DIRECTORS AND THEIR SHAREHOLDINGS

The directors in offi ce since the date of the last report and at the date of this report are as follows:

Senator Datuk Wira Syed Ali bin Tan Sri Syed Abbas AlhabsheeHaji Omar bin Khalid Haji Abdullah bin HashimHaji Hamidon bin Md Khayon Haji Ab Wahab bin Haji IbrahimEdwanee Cheah bin Abdullah George William Warren Jr. Za’aba bin Sedek (Appointed w.e.f 01.10.2008)



DIRECTORS AND THEIR SHAREHOLDINGS (Continued)

In accordance with the Register of Directors’ Shareholding, the interests of directors in offi ce at the end of the fi nancial year in shares, options and warrants over ordinary shares in the Company were as follows:-

Number of Ordinary Shares of RM0.50 each Balance as at Balance as at 01.01.2008 Acquired Sold 31.12.2008Direct Interest: Senator Datuk Wira Syed Ali bin Tan Sri Syed Abbas Alhabshee 420,000 - - 420,000Haji Omar bin Khalid 85,994,685 17,031,737 (836,000) 102,190,422Haji Abdullah bin Hashim 28,185,775 5,782,335 (222,200) 33,745,910Haji Hamidon bin Md Khayon 147,000 - (100,000) 47,000Haji Ab Wahab bin Haji Ibrahim 128,100 - - 128,100Edwanee Cheah bin Abdullah 664,270 773,854 (158,000) 1,280,124George William Warren Jr 732,900 146,580 - 879,480Za’aba bin Sedek 28,870 - (23,000) 5,870 Indirect Interest: Haji Omar bin Khalid *84,000 16,800 - 100,800

Number of ESOS Options over Ordinary Shares of RM0.50 each Balance as at Balance as at 01.01.2008 Acquired Exercise 31.12.2008Direct Interest: Haji Omar bin Khalid 1,680,000 111,400 - 1,791,400Haji Abdullah bin Hashim 1,134,000 75,600 - 1,209,600Haji Hamidon bin Md Khayon 1,260,000 84,000 - 1,344,000 Indirect Interest: Haji Omar bin Khalid *63,000 4,000 - 67,000Haji Abdullah bin Hashim *14,000 800 - 14,800

Number of Warrants over Ordinary Shares of RM0.50 each Balance as at Balance as at 01.01.2008 Acquired Sold 31.12.2008Direct Interest: Senator Datuk Wira Syed Ali bin Tan Sri Syed Abbas Alhabshee 84,000 5,599 - 89,599Haji Omar bin Khalid 17,282,937 18,094,070 - 35,377,007Haji Abdullah bin Hashim 5,624,409 5,696,034 - 11,320,443Edwanee Cheah bin Abdullah 127,890 6,007,434 - 11,631,843George William Warren Jr 147,000 156,379 - 303,379 Indirect Interest: Haji Omar bin Khalid *16,800 17,919 - 34,719 *Deemed interest by virtue of Section 134 of the Companies Act, 1965.



DIRECTORS AND THEIR SHAREHOLDINGS (Continued)

By virtue of their interest in the shares of the Company, Haji Omar bin Khalid and Haji Abdullah bin Hashim, are also deemed interested in the shares of the subsidiary companies to the extent that the Company has an interest during the current fi nancial year.

Senator Datuk Wira Syed Ali bin Tan Sri Syed Abbas Alhabshee and Haji Omar bin Khalid are the directors who will retire in accordance with Article 103 of the Company’s Articles of Association and being eligible to offer themselves for re-election.

Za’aba bin Sedek is the director who will retire in accordance with Article 109 of the Company’s Articles of Association and being eligible to offer himself for re-election.

DIRECTORS’ BENEFITS

Since the end of the previous fi nancial year, none of the directors of the Company has received or become entitled to receive any benefi t (other than a benefi t included in the aggregate amount of emoluments received or due and receivable by directors as shown in the fi nancial statements) by reason of a contract made by the Company or a related corporation with any director or with a fi rm of which the director is a member, or with a company in which the director has a substantial fi nancial interest. Neither at the end of the fi nancial year, nor at any time during the current fi nancial year, did there subsist any arrangement to which the Company was a party, whereby the directors might acquire benefi ts by means of the acquisition of shares in or debentures of the Company or any other body corporate, other than those arising from the share options granted under the Employees’ Share Option Scheme (“ESOS Scheme”).

ISSUANCE OF NEW ORDINARY SHARES

The Company has increased its issued and paid-up share capital from RM101,482,824 to RM123,294,789 pursuant to the following corporate exercises:

i) The completion of rights issue of 40,977,929 new ordinary shares of RM0.50 each in the Company together with 40,977,929 free new detachable warrants on the basis of one (1) Rights Share together with one (1) free Warrant for every fi ve (5) existing ordinary shares of RM0.50 each.

ii) Issuance of new ordinary shares arising from the exercise of ESOS options amounting to 1,375,660 new ordinary shares of RM0.50 each at exercise prices ranging from RM0.68 to RM1.14 per share.

iii) Issuance of additional 1,270,340 units of new ordinary shares of RM0.50 each arising from the exercise of warrants at exercise prices of RM0.55 and RM0.62 per share.

The new ordinary shares issued during the current fi nancial year rank pari passu in all respects with the existing ordinary shares held in the Company, other than those disclosed in the following section on unexercised options granted to executive directors and employees of the Company.

UNEXERCISED OPTIONS GRANTED

i) Employees’ Share Option Scheme (“ESOS”)

The Company’s Employees’ Share Option Scheme is governed by the Bye-Law approved by the shareholders at an Extraordinary General Meeting held on 02 August 2005 and is to be in force for a period of fi ve (5) years until 01 August 2010. The ESOS was effective since 02 August 2005.




UNEXERCISED OPTIONS GRANTED (Continued)

i) Employees’ Share Option Scheme (“ESOS”) (Continued)

The principal features of the Bye-Law of ESOS are as follows:

a) The maximum number of options which may be allotted pursuant to the ESOS (“Options”) as approved by the Securities Commission (“SC”) shall not exceed ten percent (10%) of the total issued and paid-up share capital of the Company at any point in time during the duration of the ESOS.

b) Executive directors and employees of the Group and of the Company will be eligible to participate in the ESOS provided that they fulfi ll the conditions for eligibility stipulated in the rules, terms and conditions contained in the Bye-Law (“Eligible Employees”).

c) The maximum number of new shares that may be offered and allotted to an Eligible Employee shall be determined by the ESOS Committee taking into consideration inter-alia, the Eligible Employee’s designation, job description, responsibilities and seniority.

d) The subscription price of the options issued pursuant to ESOS shall be the higher of the following:

i) at a discount of not more than ten percent (10%) from the weighted average market price of the shares as shown in the daily offi cial list issued by Bursa Malaysia Securities Berhad (“Bursa Securities”) for the fi ve (5) market days immediately preceding the date of offer; or

ii) the par value of the shares.

e) The new shares to be allotted and issued upon any exercise of the options will, upon such allotment and issuance, rank pari passu in all respects with the existing and issued shares except that the new shares so issued will not be entitled to any dividends, rights, allotments and/or any other distributions which may be declared, made or paid to shareholders prior to the date of allotment of the new shares. The new shares will be subjected to all provisions of the Articles in relation to their transfer, transmission or otherwise. The options shall not carry any right to vote at a general meeting of the Company.

As at 31 December 2008, there were 14,691,000 (2007: 14,409,350) unissued ordinary shares pursuant to the ESOS options granted under the ESOS Scheme, at an offer prices ranging from RM0.68 to RM2.35 per share (2007: RM0.77 to RM2.68 per share) respectively.

According to Section 169(11) of the Companies Act, 1965, the Company is required to disclose the name of persons to whom any option has been granted during the current fi nancial year. Pursuant to Section 169A of the Companies Act, 1965, the Company has applied and has been granted exemption by the Companies Commission of Malaysia from having to disclose the name of employees who have been granted options to subscribe for less than 500,000 ordinary shares of RM0.50 each.

During the current fi nancial year, none of the employees of the Company has been granted ESOS options above 500,000 ordinary shares of RM0.50 each.

Details of the share options granted to directors are disclosed in the section on Directors and Their Shareholdings in this report.

Details of the share option granted and exercised under the ESOS during the current fi nancial year are set out in Note 17 to the fi nancial statements.


UNEXERCISED OPTIONS GRANTED (Continued)

ii) Warrants from issuance of Bonds

On 30 November 2005, the Company issued a RM150,000,000 nominal value up to eight (8) years 4.5% per annum serial fi xed rate bonds with detachable warrants to the primary subscribers.

On 3 March 2006, the primary subscribers were allotted a total of 18,514,600 warrants to the shareholders at an offer price of RM0.24 per warrant on the basis of one (1) warrant for every fi ve (5) ordinary shares held on entitlement date.

On 29 August 2006, the Company completed the listing of an additional 9,257,000 warrants arising from the bonus issue exercise which was implemented in accordance to the Deed Poll dated 13 January 2006 on the basis of one (1) new warrant for every two (2) warrants held on entitlement date.

On 13 June 2007, the Company completed the listing of an additional 10,095,104 warrants arising from the bonus issue exercise on the basis of two (2) new warrants for every fi ve (5) existing warrants.

During the fi nancial year ended 31 December 2008, the Company issued an additional 1,265,940 units and 4,400 units of new ordinary shares of RM0.50 each arising from the exercise of warrants at an exercise price of RM0.62 per share and RM0.55 per share respectively.

As at 31 December 2008, there is a total of 35,901,972 outstanding (Warrant A) 2006/2016 warrants.

iii) Warrants from issuance of Rights Issue

During the fi nancial year ended 31 December 2008, the Company has issued additional 40,977,929 Warrants 2008/2013 pursuant to the completion of rights issue of 40,977,929 new ordinary shares of RM0.50 each in the Company together with 40,977,929 free new detachable warrants on the basis of one (1) Rights Share together with one (1) free Warrant for every fi ve (5) existing ordinary shares of RM0.50 each.

As at 31 December 2008, there is a total of 40,977,929 outstanding (Warrant B) 2008/2013 warrants.

SIGNIFICANT AND SUBSEQUENT EVENTS

Details of the signifi cant and subsequent events are set out in Notes 32 and 36 to the fi nancial statements respectively.

CHANGE OF CIRCUMSTANCES

At the date of this report, the directors are not aware of any circumstances, not otherwise dealt with in this report or the fi nancial statements of the Group and of the Company that would render any amount stated in the respective fi nancial statements misleading.




AUDITORS

The auditors, AljeffriDean, have indicated their willingness to continue in offi ce.

Signed on behalf of the Board of Directors in accordance with a resolution of the directors,

.….………………………………………Senator Datuk Wira Syed Ali bin Tan Sri Syed Abbas Alhabshee Independent Non-Executive Chairman

……………………….. Haji Omar bin KhalidManaging Director Kuala Lumpur, Date : 21 April 2009


We, Senator Datuk Wira Syed Ali bin Tan Sri Syed Abbas Alhabshee and Haji Omar bin Khalid, being the directors of Tanjung Offshore Berhad, state that in our opinion the fi nancial statements set out on pages 72 to 111 are properly drawn up in accordance with the applicable approved accounting standards for entities other than private entities issued by the Malaysian Accounting Standards Board and the provisions of the Companies Act, 1965 so as to give a true and fair view of the state of affairs of the Company as at 31 December 2008 and of the results and the cash fl ows for the fi nancial year ended on that date.

Signed on behalf of the Board of Directors in accordance with a resolution of the directors,

..………................................................... Senator Datuk Wira Syed Ali bin Tan Sri Syed Abbas Alhabshee Independent Non-Executive Chairman

…..………………........ Haji Omar bin Khalid Managing Director

Kuala Lumpur, Date: 21 April 2009

STATEMENT BY DIRECTORS


STATUTORY DECLARATION

I, Haji Abdullah bin Hashim, being the director primarily responsible for the fi nancial management of Tanjung Offshore Berhad, do solemnly and sincerely declare that the fi nancial statements set out on pages 72 to 111 are to the best of my knowledge and belief correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared )

by Haji Abdullah bin Hashim )

at Wilayah Persekutuan Kuala Lumpur )

on this day of 21 April 2009 )

Before me,

…………………….…….Commissioner for Oaths

….…….………………….


Report on the Financial Statements

We have audited the fi nancial statements of Tanjung Offshore Berhad which comprise the balance sheet as at 31 December 2008, and the income statement, statement of changes in equity and cash fl ow statement for the year then ended, and a summary of signifi cant accounting policies and other explanatory notes, as set out on pages 72 to 111.

Directors’ Responsibility for the Financial Statements

The directors of the Company are responsible for the preparation and fair presentation of these fi nancial statements in accordance with the applicable approved accounting standards for entities other than private entities and the Companies Act, 1965 in Malaysia. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of fi nancial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors’ Responsibility

Our responsibility is to express an opinion on these fi nancial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the fi nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements. The procedures selected depend on our judgment, including the assessment of risks of material misstatement of the fi nancial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company’s preparation and fair presentation of the fi nancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the fi nancial statements.

We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the fi nancial statements have been properly drawn up in accordance with the applicable approved accounting standards for entities other than private entities and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the fi nancial position of the Group and of the Company as of 31 December 2008 and of its fi nancial performance and cash fl ows for the year then ended.

Report on Other Legal and Regulatory Requirements

In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:

a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries have been properly kept in accordance with the provisions of the Act.

b) We have considered the accounts and the auditors’ reports of all the subsidiaries of which we have not acted as auditors, which are indicated in Note 7 to the fi nancial statements.

c) We are satisfi ed that the accounts of the subsidiaries that have been consolidated with the Company’s fi nancial statements are in form and content appropriate and proper for the purposes of the preparation of the fi nancial statements of the Group and we have received satisfactory information and explanations required by us for those purposes.

d) The audit reports on the accounts of the subsidiaries did not contain any qualifi cation or any adverse comment made under Section 174(3) of the Act.

REPORT OF THE AUDITORS


REPORT OF THE AUDITORS

Other Matters

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

AljeffriDean Mohd Neezal NoordinAF 1366 No.: 2162/06/09 (J)Chartered Accountants (Malaysia)

Kuala Lumpur,

Date: 21 April 2009


GROUP COMPANY NOTE 2008 2007 2008 2007 RM RM RM RM NON-CURRENT ASSETS Property, plant and equipment 5 588,797,158 311,403,419 - -Intangible assets 6 7,092,484 - - -Subsidiary companies 7 - - 31,590,308 28,211,472Amount owing by subsidiary companies 7 - - 267,084,833 149,000,000Associate companies 8 1,337,921 2,152,631 1,419,334 1,419,334Deferred tax assets 9 6,607,227 5,886,227 - - CURRENT ASSETS Inventories 10 18,246,340 2,574,857 - -Trade receivables 11 238,446,962 138,220,476 - -Other receivables, deposits and prepayments 12 26,656,729 19,145,853 3,792,036 3,939,868Amount owing by subsidiary companies 7 - - 73,956,692 66,324,652Cash and cash equivalents 13 76,692,918 20,468,406 59,943,757 7,822,638 360,042,949 180,409,592 137,692,485 78,087,158 CURRENT LIABILITIES Trade payables 14 148,830,872 94,141,643 - -Other payables and accruals 15 28,635,850 15,865,140 7,723,506 4,443,868Short term borrowings 16 87,000,630 27,098,487 20,000,000 -Provision for taxation 2,009,639 837,574 125,885 26,250 266,476,991 137,942,844 27,849,391 4,470,118 NET CURRENT ASSETS 93,565,958 42,466,748 109,843,094 73,617,040 697,400,748 361,909,025 409,937,569 252,247,846

EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT Share capital 17 123,294,789 101,482,824 123,294,789 101,482,824Treasury shares 18 (4,350,641) - (4,350,641) -Reserves 19 203,005,930 35,006,376 45,367,088 5,167,522 321,950,078 136,489,200 164,311,236 106,650,346 Minority interest 314,973 147,681 - - TOTAL EQUITY 322,265,051 136,636,881 164,311,236 106,650,346 NON-CURRENT LIABILITIES Long term borrowings 20 249,538,197 79,674,644 120,028,833 -Serial fi xed rate bond 21 125,597,500 145,597,500 125,597,500 145,597,500 697,400,748 361,909,025 409,937,569 252,247,846

See accompanying notes to the fi nancial statements.

BALANCE SHEET AS AT 31 DECEMBER 2008


INCOME STATEMENTFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2008

GROUP COMPANY NOTE 2008 2007 2008 2007 RM RM RM RM Revenue 3(o) 574,273,012 422,871,185 6,479,640 29,179,067 Cost of sales (461,246,689) (352,973,564) - - Gross profi t 113,026,323 69,897,621 6,479,640 29,179,067 Other income 1,576,183 300,386 - - Operating expenses (67,164,773) (37,316,469) (1,088,445) (1,007,816) Profi t from operations 22 47,437,733 32,881,538 5,391,195 28,171,251 Finance costs 23 (12,883,431) (8,968,637) (201,942) (140,067) Share of (loss)/profi t of associate (328,860) 392,157 - - Profi t before taxation 34,225,442 24,305,058 5,189,253 28,031,184 Taxation 24 (2,777,014) (1,076,486) (300,000) (7,917,615) Net profi t for the year 31,448,428 23,228,572 4,889,253 20,113,569 Attributable to: Equity holders of the parent 31,378,546 23,080,891 4,889,253 20,113,569Minority interest 69,882 147,681 - - 31,448,428 23,228,572 4,889,253 20,113,569 CENT CENT Earnings per share - Basic 25(a) 14.63 11.49 - Diluted 25(b) 13.36 10.49



STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2008

GR

OU

P

A

ttri

but

able

to

Eq

uity

Ho

lder

s o

f th

e P

aren

t

N

on

Dis

trib

utab

le

Dis

trib

utab

le

Fo

reig

n

Em

plo

yee

Cur

renc

y

S

hare

Tr

easu

ry

Sha

re

Cap

ital

Sha

re O

ptio

n Tr

ansl

atio

n R

eval

uatio

n A

ccum

ulat

ed

M

inor

ity

Tota

l

N

OT

E

Cap

ital

S

hare

s P

rem

ium

R

eser

ves

Res

erve

s R

eser

ve

Res

erve

P

rofi

t To

tal

Inte

rest

E

qui

ty

RM

R

M

RM

R

M

RM

R

M

RM

R

M

RM

R

M

RM

B

alan

ce a

s at

01.

01.2

007

7

0,79

4,32

1

-

4,66

7,65

6 4,

172,

259

730,

614

-

-

32,3

07,8

65

112,

672,

715

-

1

12,6

72,7

15

B

onus

issu

es (2

for

5 ba

sis)

17

2

8,72

5,93

8

-

(6,4

69,3

49)

-

-

-

-

(22

,256

,589

) -

-

-

E

SO

S s

hare

s su

bscr

iptio

n d

urin

g th

e ye

ar

17

1,05

8,44

0

-

576

,186

-

-

-

-

-

1,6

34,6

26

-

1

,634

,626

W

arra

nts

exer

cise

dur

ing

the

year

17

9

04,1

25

-

1,35

0,09

8

(4

33,9

80)

-

-

-

-

1,

820,

243

-

1,8

20,2

43

Rec

ogni

tion

of

equ

ity -

set

tled

em

ploy

ee s

hare

opt

ion

-

-

-

-

423,

154

-

-

-

42

3,15

4

-

423

,154

N

et p

rofi t

for

the

year

-

-

- -

-

-

-

23,0

80,8

91

23,

080,

891

1

47,6

81

23

,228

,572

Fi

nal d

ivid

end:

-

6%

less

tax

at 2

7%

26

-

-

- -

-

-

-

(3,1

42,4

29)

(3,

142,

429)

-

(3,1

42,4

29)

Bal

ance

as

at 3

1.12

.200

7

101,

482,

824

-

12

4,59

1

3,73

8,27

9

1,1

53,7

68

-

-

29

,989

,738

13

6,48

9,20

0

147

,681

1

36,6

36,8

81

ES

OS

sha

res

subs

crip

tion

dur

ing

the

year

17

687

,830

-

435,

356

-

-

-

-

-

1,1

23,1

86

-

1

,123

,186

R

ight

s is

sue

exer

cise

17

2

0,48

8,96

5

-

40,9

77,9

29

-

-

-

-

-

61,

466,

894

-

61,4

66,8

94

War

rant

s ex

erci

se

dur

ing

the

year

17

6

35,1

70

-

45

7,50

7

(304

,882

) -

-

-

-

787

,795

-

7

87,7

95

Cur

renc

y tr

ansl

atio

n di

ffere

nces

-

-

-

-

-

(3,8

43,7

31)

-

-

(3,

843,

731)

-

(3,8

43,7

31)

Rec

ogni

tion

of

equ

ity -

set

tled

em

ploy

ee s

hare

opt

ion

-

-

-

-

21

0,51

6

-

-

-

210

,516

-

2

10,5

16

Rep

urch

ase

of s

hare

s 18

-

(4,3

50,6

41)

-

-

-

-

-

-

(4,

350,

641)

-

(

4,35

0,64

1)A

cqui

sitio

n of

s

hare

s in

fore

ign

entit

y

-

-

-

-

-

-

-

-

-

97,4

10

97,

410

Rev

alua

tion

surp

lus

-

-

-

-

-

-

1

05,1

54,4

26

-

105,

154,

426

-

1

05,1

54,4

26

Rea

lisat

ion

of

reva

luat

ion

rese

rve

-

-

-

-

-

-

(2

,896

,131

)

2,8

96,1

31

-

-

-

Exp

ense

s in

curr

ed

on

corp

orat

e ex

erci

ses

-

-

(1,9

25,6

13)

-

-

-

-

-

(1

,925

,613

) -

(1,9

25,6

13)

Net

pro

fi t fo

r th

e ye

ar

-

-

-

-

-

-

-

31,3

78,5

46

31,

378,

546

69,8

82

31

,448

,428

Fi

nal d

ivid

end

- 6

% le

ss ta

x at

26%

26

-

-

-

-

-

-

-

(4,5

40,5

00)

(4,

540,

500)

-

(4,5

40,5

00)

B

alan

ce a

s at

31.

12.2

008

1

23,2

94,7

89

(4,3

50,6

41)

40,0

69,7

70

3,43

3,39

7

1,

364,

284

(3

,843

,731

) 10

2,25

8,29

5

59,

723,

915

321

,950

,078

31

4,97

3

322,

265,

051

See

acc

ompa

nyin

g no

tes

to th

e fi n

anci

al s

tate

men

ts.


STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2008

COMPANY Non Distributable Distributable Employee Share Treasury Share Capital Share Option Accumulated Total NOTE Capital Shares Premium Reserves Reserves Profi t Equity RM RM RM RM RM RM RM Balance as at 01.01.2007 70,794,321 - 4,667,656 4,172,259 292,612 6,178,557 86,105,405 Bonus issues (2 for 5 basis) 17 28,725,938 - (6,469,349) - - (22,256,589) -ESOS shares subscription during the year 17 1,058,440 - 576,186 - - - 1,634,626 Warrants exercise during the year 17 904,125 - 1,350,098 (433,980) - - 1,820,243 Recognition of equity – settled employee share option - - - - 118,932 - 118,932 Net profi t for the year - - - - - 20,113,569 20,113,569 Final dividend: - 6% less tax at 27% 26 - - - - - (3,142,429) (3,142,429) Balance as at 31.12.2007 101,482,824 - 124,591 3,738,279 411,544 893,108 106,650,346 ESOS shares subscription during the year 17 687,830 - 435,356 - - - 1,123,186 Rights issue exercise 17 20,488,965 - 40,977,929 - - - 61,466,894 Warrants exercise during the year 17 635,170 - 457,507 (304,882) - - 787,795 Recognition of equity – settled employee share option - - - - 210,516 - 210,516 Repurchase of shares 18 - (4,350,641) - - - - (4,350,641)Expenses incurred on corporate exercises - - (1,925,613) - - - (1,925,613)Net profi t for the year - - - - - 4,889,253 4,889,253 Final dividend: - 6% less tax at 26% 26 - - - - - (4,540,500) (4,540,500) Balance as at 31.12.2008 123,294,789 (4,350,641 40,069,770 3,433,397 622,060 1,241,861 164,311,236



CASH FLOW STATEMENT FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2008

GROUP COMPANY NOTE 2008 2007 2008 2007 RM RM RM RM CASH FLOWS FROM OPERATING ACTIVITIES

Profi t before taxation 34,225,442 24,305,058 5,189,253 28,031,184 Adjustments for: Amortisation of Bonds issuance cost 201,942 220,021 201,942 140,067Amortisation of intangible assets 247,598 - - -Dividend received - - (5,250,000) -Depreciation of property, plant and equipment 18,395,357 11,575,924 - -(Gain)/Loss on disposal of property, plant and equipment (36,282) 98,485 - -Property, plant and equipment written off 364,277 - - -Loss on foreign exchange 2,590,922 262,912 - -ESOS expenses 210,516 118,931 210,516 118,931Share of loss/(profi t) of associated company 328,860 (392,157) - -Interest expense 12,681,489 8,748,616 - -Interest income (1,279,382) (341,681) (1,229,590) (179,067) Operating profi t/(loss) before changes in working capital 67,930,739 44,596,109 (877,879) 28,111,115 Increase in inventories (15,671,483) (819,653) - -Increase in receivables (150,036,862) (28,139,458) (54,110) (569,770)Balances with subsidiary companies - - (125,716,873) (62,561,830)Increase in payables 102,118,940 8,804,121 3,213,273 686,689 Cash generated from/(used in) operations 4,341,334 24,441,119 (123,435,589) (34,333,796)Tax paid (817,720) - (134,000) - Net cash generated from/(used in) operating activities 3,523,614 24,441,119 (123,569,589) (34,333,796)



GROUP COMPANY NOTE 2008 2007 2008 2007 RM RM RM RM

CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment 27 (189,902,955) (110,531,087) - -Proceeds from disposal of property, plant and equipment 323,645 28,652 - -Investment in associated company (127,450) - - -Investment in subsidiary companies - - (3,378,836) -Purchase of intangible assets 6 (7,308,588) - - -Dividend received - - 5,250,000 -Interest received 1,279,382 341,681 1,229,590 179,067 Net cash (used in)/generated from investing activities (195,735,966) (110,160,754) 3,100,754 179,067

CASH FLOW FROM FINANCING ACTIVITIES Issuance of shares 63,377,875 30,688,503 63,377,875 30,688,503Repurchase of shares 18 (4,350,641) - (4,350,641) -Expenses incurred on corporate exercise (1,925,613) - (1,925,613) -Proceeds from borrowings 188,979,918 78,326,400 120,028,833 -Repayment of hire purchase and fi nance lease (863,010) (620,508) - -Repayment of term loan (3,955,780) (358,189) - -Interest paid (12,681,489) (8,748,616) - -Increase in fi xed deposits pledged as security (6,222,368) (70,106) (5,325,105) -Dividend paid 26 (4,540,500) (3,142,429) (4,540,500) (3,142,429)Net cash generated from fi nancing activities 217,818,392 96,075,055 167,264,849 27,546,074 Net (decrease)/increase in cash and cash equivalents 25,606,040 10,355,420 46,796,014 (6,608,655)Cash and cash equivalents at beginning of the year 7,378,942 (2,976,478) 7,822,638 14,431,293Cash and cash equivalents at end of the year 28 32,984,982 7,378,942 54,618,652 7,822,638


CASH FLOW STATEMENT FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2008


NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2008

1. CORPORATE INFORMATION

The Company is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Board of Bursa Malaysia Securities Berhad. The registered offi ce of the Company is located at 312, 3rd Floor, Block C, Kelana Square, 17, Jalan SS7/26, 47301 Petaling Jaya, Selangor Darul Ehsan.

The Company is principally engaged in investment holding. The principal activities of the subsidiaries and associated companies are set out in Notes 7 and 8 to the fi nancial statements respectively. There have been no signifi cant changes in the nature of these principal activities of the Group and of the Company during the current fi nancial year.

The fi nancial statements were authorised for issuance by the Board of Directors of the Company on 21 April 2009.

2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS

The fi nancial statements of the Group and of the Company have been prepared on a historical cost convention unless otherwise indicated in the other section of accounting policies, are drawn up in accordance with the applicable Malaysian Accounting Standards Board (“MASB”) approved accounting standards for entities other than private entities in Malaysia and in compliance with the provisions of the Companies Act, 1965.

The accounting policies have been consistently applied by the Group and by the Company and are consistent with those used in the previous fi nancial year.

3. SIGNIFICANT ACCOUNTING POLICIES

a) Adoption of New/Revised Financial Reporting Standards (“FRSs”) and Interpretation

In the current fi nancial year, the Group and the Company has adopted all the new/revised FRSs and Interpretation issued by the MASB that are relevant to its operations and effective for annual years beginning on 1 January 2008 as follows:

FRSs and Interpretation Title FRS 107 Cash Flow StatementsFRS 112 Income TaxesFRS 118 RevenueFRS 134 Interim Financial ReportingFRS 137 Provisions, Contingent Liabilities and Contingent AssetsIC Interpretation 1 Changes in Existing Decommissioning, Restoration and Similar LiabilitiesIC Interpretation 8 Scope of FRS 2Amendment to FRS 121 The Effects of Changes in Foreign Exchange Rates – Net Investment in a Foreign Operation

The adoption of the above FRSs and Interpretation has no material effect on the results for the current or prior years.


3. SIGNIFICANT ACCOUNTING POLICIES (Continued)

b) New/Revised FRSs and Interpretations Not Yet Effective

The Group and the Company has not applied the following new/revised FRSs and interpretations that are relevant to its operations which have been issued but are not effective:

FRSs and Interpretations Title Effective Date FRS 7 Financial Instruments: Disclosures 1 January 2010FRS 8 Operating Segments 1 July 2009FRS 139 Financial Instruments: Recognition and Measurement 1 January 2010IC Interpretation 9 Reassessment of Embedded Derivatives 1 January 2010IC Interpretation 10 Interim Financial Reporting and Impairment 1 January 2010

The Group and the Company does not expect that the adoption of the above pronouncements will have a signifi cant impact on the fi nancial statements except for FRS 139. This standard establishes principles for recognising and measuring fi nancial assets, fi nancial liabilities and some contracts to buy and sell non-fi nancial items. By virtue of the exemption in paragraph 103AB of FRS 139, the impact on the fi nancial statements upon fi rst adoption of this standard as required by paragraph 30(b) of FRS 108 Accounting Policies, Changes in Accounting Estimates and Errors is not disclosed.

c) Functional And Presentation Currency

The individual fi nancial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated fi nancial statements are presented in Ringgit Malaysia (RM), which is also the Company’s functional currency.

d) Basis of Consolidation

The consolidated fi nancial statements include the audited fi nancial statements of the Company and all of its subsidiary companies made up to the end of the fi nancial year. The results of the subsidiary companies acquired are included in the consolidated fi nancial statements from the date of acquisition. All signifi cant inter-company transactions and balances are eliminated on consolidation.

Subsidiary companies are consolidated using the acquisition method of accounting from the date control is transferred to the Group and are no longer consolidated from the date control ceases.

Minority interests are measured at their shares of the net assets of the subsidiary companies.

Goodwill on acquisition, being the difference between the cost of acquisition and the underlying net asset value of the subsidiary companies at the date of acquisition.

Goodwill is stated at cost less impairment losses. The policy for the recognition and measurement of impairment losses are in accordance with Note 3(i) to the fi nancial statements.

Negative goodwill represents the excess of the Group’s interest in the fair value of the identifi able assets and liabilities of a subsidiary at the date of acquisition over the cost of acquisition. Negative goodwill is recognised immediately in the income statement.





e) Subsidiary Companies

Subsidiary companies are those companies in which the Group has long term equity interest of more than 50% or has power to exercise control over the fi nancial and operating policies as to obtain benefi t from its activities.

Investment in subsidiary companies which is eliminated on consolidation is stated in the Company’s fi nancial statements at cost less impairment losses. The policy for the recognition and measurement of impairment losses are in accordance with Note 3(i) to the fi nancial statements.

f) Associate Company

An associate company is defi ned as an investment where the Group holds for long-term purposes between 20% to 50% of the issued equity share capital of the investee’s company, and exercises signifi cant infl uence but not control, over the investee’s company management.

Investment in associate company is accounted for in the consolidated fi nancial statements using the equity method of accounting based on the management fi nancial statements of the investee’s company made up to the end of the fi nancial year.

g) Property, Plant And Equipment

All items of property, plant and equipment are initially recorded at cost. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probably that future economic benefi ts associated with the item will fl ow to the Group and the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income statement during the current fi nancial year in which they are incurred.

Subsequent to recognition, property, plant and equipment are stated at cost or valuation less accumulated depreciation and any accumulated impairment losses.

Revaluations are made at least once in every fi ve years based on a valuation by an independent valuer on an open market value basis. Any revaluation increase is credited to equity as revaluation surplus, except to the extent that it reverses a revaluation decrease for the same asset previously recognised as an expense, in which case the increase is recognised in the income statement to the extent of the decrease previously recognised. A revaluation decrease is fi rst offset against unutilised previously recognised revaluation surplus in respect of the same asset and the balance thereafter recognised as an expense.

Depreciation of property, plant and equipment is provided for on a straight-line basis to write off the cost of each asset to its residual value over the estimated useful life as follows:

%Vessels 5Freehold land and building 2Leasehold land and building Over 80 months or 50 yearsFurniture and fi ttings 10Renovation 10Workshop tools 20Offi ce equipments 10 – 33 1/3Motor vehicles 20 – 25Machinery 10 – 33 1/3



g) Property, Plant And Equipment (Continued)

Depreciation of vessels under construction and commissioning commences when the vessels are delivered and ready for their intended use.

The residual values, useful life and depreciation method are reviewed at each fi nancial year end to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefi ts embodied in the items of property, plant and equipment.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefi ts are expected from its use or disposal. The difference between the net disposal proceeds, if any and the net carrying amount is recognised in the income statement and the unutilised portion of the revaluation surplus on that item is take directly to accumulated profi t.

h) Intangible Assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets required in a business combination as their fair values as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. The useful life of intangible assets is assessed to be either fi nite or indefi nite. Intangible assets with fi nite lives are amortised on straight-line basis over the estimated economic useful lives and assessed for impairment whenever there is an indication that the intangible assets may be impaired. The amortisation period and the amortisation method for an intangible asset with a fi nite useful life are reviewed at least at each balance sheet date.

Intangible assets with indefi nite useful lives are not amortised but tested for impairment annually or more frequently if the events or changes in circumstances indicate that the carrying amount may be impaired either individually or at the cash-generating unit level. The useful life of an intangible asset with an indefi nite life is also reviewed annually to determine whether the useful life assessment continues to be supportable.

i) Impairment of Assets

At each balance sheet date, the Group and the Company reviews the carrying amounts of its assets to determine whether there is any indication of impairment. If any such indication exists, impairment is measured by comparing the carrying amount of the assets with their recoverable amounts. Recoverable amounts are the higher of net selling price and value in use, which is measured by reference to discounted future cash fl ows.

An impairment loss is recognised as an expense in the income statement immediately, unless the assets are carried at a revalued amount. Any impairment losses of revalued assets are treated as a revaluation decrease to the extent of any unutilised previously recognised revaluation surplus for the same assets. Reversal of impairment losses recognised in prior years are recorded when the impairment losses recognised for the assets no longer exist or have decreased.

j) Plant and Equipment Acquired Under Hire Purchase Arrangements

Plant and equipment acquired under hire purchase arrangements are being capitalised and the corresponding obligations treated as liabilities in the fi nancial statements.

Finance costs are allocated to the income statement to give a constant periodic rate of interest on the remaining hire purchase payables.

Plant and equipment acquired under hire purchase arrangements are depreciated over their expected useful lives on the same basis as owned assets.





k) Leased Assets

Leased of assets where substantially all the risks and benefi ts incidental to the ownership of the asset, but not the legal ownership, are transferred to the Group are classifi ed as fi nance leases. Finance leases are capitalised, recording an asset and liability equal to the present value of the minimum lease payments, including any guaranteed residual values.

Leased of assets are depreciated on straight-line basis over the term of the lease estimated useful lives where it is likely that the Group will obtain ownership of the asset. Lease payment is allocated between the reduction of the lease liability and the lease interest expense for the year.

Leased payments for operating leases, where substantially all the risks and benefi ts remain with the lessor, are charged as an expense in the year in which they are incurred.

l) Employee Benefi ts

i) Short term benefi ts

Salaries, wages, bonuses, paid annual leave, allowances and social security contributions are recognised as an expense in the year in which the associated services are rendered by employees of the Group and of the Company.

ii) Defi ned contribution plans

The Group and the Company makes statutory contributions to the Employee Provident Fund (“EPF”), a defi ned contribution plan. Obligations for contributions to defi ned contribution plan are recognised as an expense in the income statement as incurred.

iii) Employee Share Option Scheme

For the equity-settled share-based compensation transactions, the fair value of the employee services received in exchange for the grant of the options is recognised as an expense. The total amount to be expensed on a straight-line basis over the vesting period is determined by reference to the fair value of the options granted excluding the effect of non-market vesting conditions. Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. Fair value is measured using the Black-Scholes pricing model. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. At each balance sheet date, the Group revises its estimates of the numbers of options that are expected to become exercisable. It recognised the impact of the revision of original estimates, if any, in the income statement, with a corresponding adjustment to equity. The proceeds received net of any directly attributable transaction costs are credited to share capital when the options are exercised.

m) Financial Instruments

i) Cash and cash equivalents

Cash and cash equivalents comprise of cash in hand and bank balances, demand deposits and deposits with licensed bank, which are readily convertible to known amounts of cash and subject to insignifi cant risk of change in value.



m) Financial Instruments (Continued)

ii) Trade and other receivables

Trade and other receivables are carried at anticipated realisable value. Bad debts are written off in the year in which they are identifi ed. An allowance is made for doubtful debts based on a review of all outstanding amounts at the balance sheet date.

iii) Financial liabilities

Financial liabilities are recognised when the Group and the Company becomes a party to the contractual agreements of the instrument.

The particular recognition methods adopted on each of the item in the fi nancial liabilities are set out below:

a) Trade and other payables

Trade and other payables are stated at cost which is the fair value of the consideration to be paid in the future for goods and services received.

b) Borrowing costs

Borrowing costs incurred that are directly attributable to the construction of property, plant and equipment are recognised as part of the cost of those assets during the period of time that is required to complete and prepare the assets for their intended use.

All other borrowing costs are recognised as an expense in the year in which they are incurred.

c) Serial payment bond

The Company issued RM150,000,000 nominal value of up to 8 years serial fi xed rate bonds with up to 18,514,600 detachable warrants in the fi nancial year ended 2006. The Company recognised separately the component of a liability and equity instruments as disclosed in Note 21 to the fi nancial statements.

iv) Equity instruments

Ordinary shares are classifi ed as equity. Dividend on ordinary shares is recognised in equity in the year in which they are declared.

n) Treasury Shares

A purchase by the Company of its own equity shares is accounted for under the treasury stock method. Under this method, the shares repurchased and held as treasury shares is measured and carried at the cost of repurchase (including any directly attributable incremental external costs, net of tax) on initial recognition and subsequently. On presentation in the balance sheet, the carrying amount of the treasury shares is offset against equity.

Where treasury shares are distributed as share dividends, the cost of the treasury shares is applied in the reduction of the share premium account or the distributable reserves, or both. Where treasury shares are reissued by re-sale in the open market, the difference between the sales consideration and the carrying amount of the treasury shares is shown as the movement in equity. As treasury shares, the rights attached as to voting, dividends and participation in other distribution are suspended.





o) Revenue Recognition

i) Income from contracts/projects

Income from contracts/projects of the Group and of the Company is recognised in the income statement on percentage of completion method.

ii) Income from chartering and hiring of vessel Income from chartering and hiring of vessel is accrued by reference to the agreement entered into.

iii) Income from service charges

Income from service charges is recognised on an accrual basis.

iv) Income from interest

Income from interest is recognised on an accrual basis.

v) Dividend income

Dividend income is recognised when the right to receive payment is established.

p) Taxation

Income tax on the profi t or loss comprises current and deferred tax. Current tax is the expected amount of income taxes payable in respect of the taxable profi t for the year and is measured using the enacted tax rates relevant to the fi nancial year.

Deferred tax is provided for, using the liability method, on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts in the fi nancial statements. In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that future taxable profi t will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised.

q) Inventories

Inventories comprising turbine compressor spare parts, work-in-progress and long term contract balances which is stated at the lower of cost (fi rst-in, fi rst-out basis) and net realisable value.

Cost of turbine compressor spare parts comprises the original cost of purchase plus cost of bringing the inventories to its location.

Cost of work-in-progress long term contract balances includes direct materials, direct labour and an appropriate portion of fi xed and variable overhead.

r) Provisions For Liabilities

Provisions are recognised when the Group and the Company have a present legal or constructive obligation as a result of past events, it is probable that the Group and the Company will be required to settle the obligation, and a reliable estimate of the amount can be made. Provisions are measured at the directors’ best estimate of the expenditure required to settle the obligation at the balance sheet date.



s) Foreign Currency

i) Foreign currency transactions

In preparing the fi nancial statements of the individual entities, transaction in currencies other than the entity’s functional currency are recorded in the functional currencies using the exchange rates prevailing at the dates of the transactions. At each balance sheet date, monetary items denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on the translation of monetary items, are included in the income statement for the period except for exchange differences arising on monetary items that form part of the Group’s net investment in foreign operation are initially taken directly to the foreign currency translation reserve within equity until the disposal of the foreign operations, at which time they are recognised in the income statement.

Exchange differences arising on monetary items that form part of the Company’s net investment in foreign operation, regardless of the currency of the monetary item, are recognised in income statement in the Company’s fi nancial statements or individual fi nancial statements of the foreign operation, as appropriate.

ii) Foreign operations

The results and fi nancial position of foreign operations that have a functional currency different from the presentation currency of the consolidated fi nancial statements are translated into Ringgit Malaysia (RM) as follows:

i) Assets and liabilities for each balance sheet presented are translated at the closing rate prevailing at the balance sheet date;

ii) Income and expenses for each income statement are translated at average exchange rates for the year, which approximates the exchange rates at the dates of transactions; and

iii) All resulting exchange differences are taken to the foreign currency translation reserve within equity.

Goodwill and fair value adjustments arising on the acquisition of foreign operations on or after 01 January 2008 are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and translated at the closing rate at the balance sheet date. Goodwill and fair value adjustment which arose on the acquisition of foreign subsidiaries before 01 January 2008 are deemed to be assets and liabilities of the parent company and are recorded in RM at the rates prevailing at the date of acquisition.

The principal closing rates used in the translation of foreign currency amounts are as follows:

31.12.2008 31.12.2007 RM RM 1 United States Dollar (USD) 3.4675 3.31151 Great Britain Pounds (GBP) 5.0118 6.61161 Rupiah (Rp) 0.0003 -





t) Signifi cant Accounting Estimates and Judgements

The signifi cant accounting estimates and judgements that have a signifi cant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next fi nancial year are discussed below.

Useful lives and residual value of property, plant and equipment

Property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives after deducting its residual value. The management exercises their judgement in estimating the useful lives and the residual value of the depreciable assets. The Group and the Company assesses annually the residual value and the useful lives of the property, plant and equipment and if the expectation differs from the original estimate, such difference will impact the depreciation in the period in which such estimate has been charged. Deferred tax assets

Deferred tax assets are recognised for all unabsorbed capital allowances to the extent that it is probable that future taxable profi ts will be available against which the capital allowances can be utilised. Signifi cant management judgment is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profi ts together with future tax planning strategies. The total carrying amounts of unabsorbed capital allowances are disclosed in Note 9 to the fi nancial statements.

Share-based payments to employees

The cost of providing the share-based payments to the employees is charged to the income statement over the vesting period. The cost is based on the fair value of the options and the number of the options expected to vest. The fair value of the options is determined using Black Scholes pricing model.

Amortisation of intangible assets

The goodwill of patent and purchases are amortised on a straight line basis over their useful lives over 17 years and 10 years respectively. The Group assesses annually the useful lives of the intangible assets and if the expectation differs from the original estimate, such difference will impact the amortisation expenses in the period in which such estimate has been charged.

4. FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES

The operation of the Group and the Company is subject to a variety of fi nancial risks. The Group’s and the Company’s overall fi nancial risk management objective is to ensure that the Group and the Company creates value for its shareholders.

The main areas of fi nancial risks faced by the Group and the Company are as follows:

i) Credit risk

The Group’s main exposure to credit risk is in respect of its trade and other receivables. The Group manages the exposure to credit risk by performing credit evaluation on the major customers and outstanding debts are being monitored and pursued for full recovery.


4. FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES (Continued)

ii) Liquidity and cash fl ow risk

The Group and the Company actively manages its debts maturity profi le, operating cash fl ows and availability of funding so as to ensure that all repayment and funding needs are met.

iii) Interest rate risk

The Group and the Company have cash and bank balances and deposits placed with licensed banks. The Group and the Company manages its interest rate risks by placing such balances on varying maturities and interest rate terms.

The Group and the Company are also exposed to interest rate risk through the impact of rate charges on its borrowings. To mitigate the interest rate risk, the management of the Group and the Company consistently monitors the interest rate exposure against the existing/potential income from operations.

iv) Foreign currency exchange risk

The Group and the Company imports a wide range of engineering equipment and spare parts for its business operations from various countries, subjecting its purchase costs to foreign exchange fl uctuations. In this aspect, the Group and the Company mitigates its exposure to foreign exchange fl uctuations through back-to-back purchase and selling arrangements between its customers and the foreign suppliers. As a result, the Group’s and the Company’s purchase costs and currencies transacted are matched to the revenues generated from the sale of the Group’s products, thus forming a natural hedge.

5. PROPERTY, PLANT AND EQUIPMENT

GROUP Freehold Leasehold

Vessels under land land Furniture and Workshop Offi ce Motor

Vessels commissioning and building and building fi ttings Renovation tools equipments vehicles Machinery Total

RM RM RM RM RM RM RM RM RM RM RM

At 31 December 2008

Cost or Valuation

Beginning of the year

At cost 249,102,595 54,191,553 4,041,366 2,478,000 1,319,023 5,124,191 400,234 4,392,920 2,958,403 6,636,120 330,644,405

Addition 1,350,000 177,390,040 1,038,402 36,706 1,009,609 2,156,884 291,296 5,425,597 967,821 1,445,065 191,111,420

Revaluation 85,847,404 - - - - - - - - - 85,847,404

Disposal - - - - - (9,420) - (73,600) (66,183) (53,862) (203,065)

Write off - - - - - (458,568) - - - - (458,568)

Tranfer (to)/from 93,657,329 (93,657,329) - - - - - - - - -

End of the year 429,957,328 137,924,264 5,079,768 2,514,706 2,328,632 6,813,087 691,530 9,744,917 3,860,041 8,027,323 606,941,596

Representing:

At cost 95,007,328 137,924,264 5,079,768 2,514,706 2,328,632 6,813,087 691,530 9,744,917 3,860,041 8,027,323 271,991,596

At valuation 334,950,000 - - - - - - - - - 334,950,000

429,957,328 137,924,264 5,079,768 2,514,706 2,328,632 6,813,087 691,530 9,744,917 3,860,041 8,027,323 606,941,596




5. PROPERTY, PLANT AND EQUIPMENT (Continued)

GROUP Freehold Leasehold

Vessels under land land Furniture and Workshop Offi ce Motor

Vessels commissioning and building and building fi ttings Renovation tools equipments vehicles Machinery Total

RM RM RM RM RM RM RM RM RM RM RM

At 31 December 2008

Accumulated

Depreciation

Beginning of the year 13,079,455 - 317,127 133,533 451,941 1,336,219 42,798 935,183 1,185,214 1,759,516 19,240,984

Reversal of depreciation due

to revaluation (19,307,020) - - - - - - - - - (19,307,020)

Charge for the year 14,999,034 - 99,842 51,771 179,681 605,488 56,203 801,069 835,209 767,060 18,395,357

Effects of movements in

exchange rates - - - - - - - (1,604) - (10,242) (11,846)

Disposal - - - - - - - (25,612) (4,756) (48,380) (78,748)

Write off - - - - - (94,291) - - - - (94,291)

End of the year 8,771,469 - 416,969 185,304 631,622 1,847,416 99,001 1,709,036 2,015,667 2,467,954 18,144,438

Net Book Value

At cost 92,252,277 137,924,264 4,662,799 2,329,402 1,697,010 4,965,671 592,529 8,035,881 1,844,374 5,559,369 259,863,576

At valuation 328,933,582 - - - - - - - - - 328,933,582

421,185,859 137,924,264 4,662,799 2,329,402 1,697,010 4,965,671 592,529 8,035,881 1,844,374 5,559,369 588,797,158

At 31 December 2007

Cost

Beginning of the year

At cost 129,485,178 69,449,775 1,478,703 2,478,000 818,766 4,211,596 217,123 2,546,422 2,416,382 6,031,058 219,133,003

Addition - 104,359,195 2,562,663 - 500,257 912,595 183,111 1,846,498 762,662 721,362 111,848,343

Disposal - - - - - - - - (220,641) (116,300) (336,941)

Tranfer (to)/from 119,617,417 (119,617,417) - - - - - - - - -

End of the year 249,102,595 54,191,553 4,041,366 2,478,000 1,319,023 5,124,191 400,234 4,392,920 2,958,403 6,636,120 330,644,405

Representing:

At cost 249,102,595 54,191,553 4,041,366 2,478,000 1,319,023 5,124,191 400,234 4,392,920 2,958,403 6,636,120 330,644,405

Accumulated

Depreciation

Beginning of the year 3,859,260 - 262,166 83,973 327,583 803,718 14,384 567,375 791,136 1,165,272 7,874,867

Charge for the year 9,220,195 - 54,961 49,560 124,358 532,501 28,414 367,808 588,269 609,858 11,575,924

Disposal - - - - - - - - (194,191) (15,614) (209,805)

End of the year 13,079,455 - 317,127 133,533 451,941 1,336,219 42,798 935,183 1,185,214 1,759,516 19,240,986

Net Book Value

At cost 236,023,140 54,191,553 3,724,239 2,344,467 867,082 3,787,972 357,436 3,457,737 1,773,189 4,876,604 311,403,419


5. PROPERTY, PLANT AND EQUIPMENT (Continued)

a) Included in the property, plant and equipment are motor vehicles and offi ce equipment which is acquired by means of hire purchase and lease arrangements with a net book value of RM1,424,833 (2007: RM1,319,338) and RM1,103,348 (2007: RM818,212) respectively.

b) Borrowing costs amounting to RM6,859,487 (2007: RM6,747,260) from various fi nanciers entered into for new vessels under construction and commissioning were capitalised.

c) Freehold and leasehold land and building have been pledged to secure the Group’s bank overdraft (Note 16 to the fi nancial statements).

d) Certain vessels have been pledged to secure the relevant borrowings from the banks and Bonds Programme as disclosed in Notes 20 and 21 to the fi nancial statements respectively.

e) On 17 July 2008, an independent professional valuer, Matthews Daniel International Pte. Ltd. has revalued seven (7) vessels within the Group on an open market value basis. Had the revalued vessels been carried at historical cost, the net book value of the vessels that would have been included in the fi nancial statements of the Group as at 31 December 2008 would have been recorded as follows:

2008 2007 RM RM Vessels 224,151,005 236,023,140

6. INTANGIBLE ASSETS

GROUP 2008 RMCost Additions 7,308,588 End of the year 7,308,588 Amortisation Charge for the year 247,598Effect on movements in exchange rates (31,494) End of the year 216,104 Net book value At 31 December 2008 7,092,484

Goodwill for acquiring the business activities is being written off in equal annual installments over its estimated economic life of 10 years. Goodwill for patent is being written off in equal annual installments over its useful life of 17 years.




7. SUBSIDIARY COMPANIES

COMPANY 2008 2007 RM RM Unquoted shares, at cost 31,590,308 28,211,472

The details of the subsidiary companies are as follows:

Group Country ofSubsidiary Companies Effective Interest Incorporation Principal Activities 2008 2007 % % Held by the Company: Tanjung Offshore Services Sdn. Bhd. 100.00 100.00 Malaysia Integrated service provider to the oil and gas and related industries. Tanjung Kapal Services Sdn. Bhd. 100.00 100.00 Malaysia Provision of ship management services to the oil and gas related industries. Tanjung Offshore Marine Services Sdn. Bhd. 100.00 100.00 Malaysia Intended business of owning and leasing offshore vessels.

Tanjung CSI Sdn. Bhd. 100.00 100.00 Malaysia To supply, design, confi gure, integrate, test, install and commission distributed control systems, programmable logic controllers, supervisory control and data acquisitions, safety shutdown systems, fi re gas systems, fi re addressable systems, liquid & gas analyser systems, control valves, instrumentation and electrical heat tracing systems and to train and supply manpower for after sales services.

* PT Tanjung Offshore Nusantara 80.00 - Indonesia Integrated service provider to the oil and gas and related industries in Indonesia.

* Tanjung Citech UK Limited 100.00 - England Ownership of CiBAS technology

and Wales patent and intellectual property rights.

* The fi nancial statements of these companies are not audited by AljeffriDean.


7. SUBSIDIARY COMPANIES (Continued)

Group Country ofSubsidiary Companies Effective Interest Incorporation Principal Activities 2008 2007 % % Held by Tanjung Offshore Services Sdn. Bhd.:

Tanjung Maintenance Services Sdn. Bhd. 98.75 98.75 Malaysia Provision of maintenance services to the oil and gas and related industries.

Tanjung PetroConsult Sdn. Bhd. 100.00 100.00 Malaysia Provision of engineering and

professional manpower services to the oil and gas and related industries.

Tanjung NewEnergy Services Sdn. Bhd. 92.86 92.86 Malaysia Provision of project management

services to the engineering and energy industries.

Held by Tanjung Citech UK Limited: * Citech Energy Recovery 100.00 - England Manufacture of waste heat recovery Systems UK Limited and Wales units for the oil and gas industry. * The fi nancial statements of these companies are not audited by AljeffriDean.

a) Amount Owing By Subsidiary Companies

COMPANY 2008 2007 RM RM

Non-current assets Amount owing by subsidiary companies (Note i) 267,084,833 149,000,000 Current assets Amount owing by subsidiary companies (Note ii) 73,956,692 66,324,652

Note i:

The amount owing by subsidiary companies are unsecured, subject to interest at 4.50% - 6.35% (2007: 4.50%) per annum and are repayable after twelve (12) months.

Note ii:

The amount owing by subsidiary companies are unsecured, interest free and has no fi xed term of repayments.




8. ASSOCIATE COMPANIES

GROUP COMPANY 2008 2007 2008 2007 RM RM RM RM

Unquoted shares, at cost 1,546,784 1,419,334 1,419,334 1,419,334Share of attributable post acquisition (loss)/profi t after taxation (208,863) 733,297 - - 1,337,921 2,152,631 1,419,334 1,419,334 Represented by: Share of net tangible assets 1,337,921 2,152,631 1,419,334 1,419,334

The details of the associated companies are as follows:

Group Country ofSubsidiary Companies Effective Interest Incorporation Principal Activities 2008 2007 % % Held by the Company: * Cendor Mopu Producer Ltd 20 20 Malaysia To own, lease, sub-lease, maintain, (Wilayah operate and manage the Mobile Persekutuan, Offshore Production Unit to carry Labuan) out oil and gas operations. Held by Tanjung Offshore Services Sdn. Bhd.: * Hercules Tanjung Asia Sdn. Bhd. 50 - Malaysia Provision of drilling services in relation (Wilayah to exploration and exploitation of oil. Persekutuan, Labuan)

* The fi nancial statements of these companies are not audited by AljeffriDean.

The amount owing by associated company is unsecured, interest free and has no fi xed term of repayments.

The Group’s share of revenue and loss of associates is as follows:

2008 2007 RM RM Revenue 74,326,957 8,209,382 Net (loss)/profi t for the year (942,160) 421,164


8. ASSOCIATE COMPANIES (Continued)

The Group’s share of assets and liabilities of associates is as follows:

2008 2007 RM RM Non-current assets 39,941,881 41,914,786Current assets 64,266,978 7,613,517Current liabilities (97,142,490) (36,444,852)Non-current liabilities (5,776,335) (11,035,276)Currency translation differences 47,887 104,456 Net tangible assets 1,337,921 2,152,631

9. DEFERRED TAX ASSETS

GROUP 2008 2007 RM RMProperty, plant and equipment: Beginning of the year 5,886,227 5,506,695Recognised in the income statement (Note 24) 721,000 (128,000) Employee Share Option Reserves: Charged to Employee Share Option Reserves - 507,532 End of the year 6,607,227 5,886,227

The deferred tax assets, determined after appropriate offsetting as follows: 2008 2007 RM RMUnabsorbed capital allowances 37,016,062 37,440,000Accelerated capital allowances (31,256,289) (31,967,125)Exercise of options pursuant to Employee Share Option Scheme 847,454 413,352 6,607,227 5,886,227

10. INVENTORIES GROUP 2008 2007 RM RM

At cost: Turbine compressor spare parts 1,036,369 229,808Work-in-progress 5,188,718 2,345,049Long term contract balances 12,021,253 - 18,246,340 2,574,857




11. TRADE RECEIVABLES

The currency exposure profi le of trade receivables are as follows:-

GROUP 2008 2007 RM RM Ringgit Malaysia 174,080,088 91,378,431 Other foreign currencies 64,366,874 46,842,045 End of the year 238,446,962 138,220,476

The credit term of trade receivables are ranging from 30 to 120 days depending on types of contracts and projects.

12. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS


Deposits 1,279,827 1,767,239 - 1,500Prepayments 15,720,141 10,675,937 - -Others 9,656,761 6,702,677 3,792,036 3,938,368 End of the year 26,656,729 19,145,853 3,792,036 3,939,868

13. CASH AND CASH EQUIVALENTS


Cash and bank balances 19,819,930 18,660,432 5,522,323 7,822,638Fixed deposits with licensed banks 56,872,988 1,807,974 54,421,434 - 76,692,918 20,468,406 59,943,757 7,822,638

Included in the Group and the Company’s fi xed deposits with licensed banks amounting to RM49,096,329 (2007: RM6,923,544), the use of which is restricted for the purpose of fi nancing the capital expenditure.

Included also in the Group and the Company’s fi xed deposits with licensed banks amounting to RM7,714,874 (2007: RM1,492,506) and RM5,325,105 (2007: Nil) respectively are pledged as security for the others banking facilities.


14. TRADE PAYABLES

The currency exposure profi le of trade payables are as follows:-

GROUP 2008 2007 RM RM Ringgit Malaysia 125,434,700 59,835,044Other foreign currency 23,396,172 34,306,599 End of the year 148,830,872 94,141,643

The credit term of trade payables are ranging from 30 to 45 days.

15. OTHER PAYABLES AND ACCRUALS


Other payables 12,377,109 6,518,444 6,913,722 3,418,932Provision 819,476 1,552,586 66,250 1,024,936Accruals 15,439,265 7,794,110 743,534 - End of the year 28,635,850 15,865,140 7,723,506 4,443,868

16. SHORT TERM BORROWINGS


Short term loan (Note 20) 10,585,000 358,189 - -Revolving credit 19,553,044 14,435,559 - -Bank overdraft 35,993,062 11,596,958 - -Hire purchase and fi nance lease payables (Note 29) 869,524 707,781 - -Serial fi xed rate bond (Note 21) 20,000,000 - 20,000,000 - 87,000,630 27,098,487 20,000,000 -

Revolving Credit

Revolving credit known as Murabahah Tawarruq is payable to Kuwait Finance House (Malaysia) Berhad (“KFHMB”) and was obtained for Group’s working capital requirement in purchasing of equipment, payment for salary and general working capital.

The Murabahah Tawarruq profi t margin is at 0.85% + KFHMB’s Cost of Fund at the date of each drawdown and is repayable within three (3), six (6) and twelve (12) months from drawdown. Interest incurred during the current fi nancial year was RM1,089,215 (2007 : RM402,923). The said facility is secured by corporate guarantee from the Company for RM25,000,000.




16. SHORT TERM BORROWINGS (Continued)

Bank Overdraft

The bank overdraft of the Group is secured by the freehold and leasehold land and building of the subsidiary companies (Note 5), pledged of fi xed deposits (Note 13) and corporate guarantee by the Company for RM13,650,000.

The effective interest rate is at 8.75% (2007: 8.75%) per annum and the Islamic overdraft profi t rate is at 3.00% - 7.75% (2007: 3.00% - 7.75%) per annum.

17. SHARE CAPITAL

GROUP AND COMPANY 2008 2007 RM RM Ordinary shares of RM0.50 each Authorised: Beginning of the year 200,000,000 100,000,000Created during the year - 100,000,000 End of the year 200,000,000 200,000,000 Issued and fully paid-up: Beginning of the year 101,482,824 70,794,321ESOS shares subscription during the year (Note i) 687,830 1,058,440Rights issue exercise (Note ii) 20,488,965 -Warrants exercise during the year (Note iii) 635,170 904,125Bonus issues (Note iv) - 28,725,938 End of the year 123,294,789 101,482,824

Note i:

The Company’s ESOS came into effect on 2 August 2005. The ESOS shall be in force for a period of 5 years until 1 August 2010.

The principal features of the Bye-Law of ESOS are as follows:

a) The maximum number of options which may be allotted pursuant to the ESOS (“Options”) as approved by the Securities Commission (“SC”) shall not exceed ten percent (10%) of the total issued and paid-up share capital of the Company at any point in time during the duration of the ESOS.

b) Executive directors and employees of the Group and of the Company will be eligible to participate in the ESOS provided that they fulfi ll the conditions for eligibility stipulated in the rules, terms and conditions contained in the Bye-Law (“Eligible Employees”).

c) The maximum number of new shares that may be offered and allotted to an Eligible Employee shall be determined by the ESOS Committee taking into consideration inter-alia, the Eligible Employee’s designation, job description, responsibilities and seniority.


17. SHARE CAPITAL (Continued)

Note i: (Continued)

d) The subscription price of the options issued pursuant to ESOS shall be the higher of the following:

i) at a discount of not more than ten percent (10%) from the weighted average market price of the shares as shown in the daily offi cial list issued by Bursa Malaysia Securities Berhad (“Bursa Securities”) for the fi ve (5) market days immediately preceding the date of offer; or

ii) the par value of the shares.

e) The new shares to be allotted and issued upon any exercise of the options will, upon such allotment and issuance, rank pari passu in all respects with the existing and issued shares except that the new shares so issued will not be entitled to any dividends, rights, allotments and/or any other distributions which may be declared, made or paid to shareholders prior to the date of allotment of the new shares. The new shares will be subjected to all provisions of the Articles in relation to their transfer, transmission or otherwise. The options shall not carry any right to vote at a general meeting of the Company.

f) Options are exercisable, in whole or in part (provided that an option is exercised in part in respect of 1,000 shares or any multiple thereof) as follows:

Percentage of Options ExercisableNumber of Options from Acceptance DateGranted 1st year 2nd year 3rd year 4th year 5th year 20,000 and below 50% 50% - - -20,001 to 50,000 20% 20% 20% 20% 20%Above 50,000 10% 15% 20% 25% 30%

Details of the options granted under the scheme to take up unissued ordinary shares of the Group are as follows:

Number of ESOS Options Exercise Outstanding Price (s) ExpiryCommencement of ESOS at 31.12.2008 per Share Date 2 August 2005 14,691,000 Range from RM0.68 1 August 2010 to RM2.35

The fair values of the options are estimates on the date of grant using the Black Scholes option pricing model with the following assumption used for grants:

Weighted average share price RM1.85Weighted average exercise price RM1.62Dividend yield expected 6.00%Risk-free annual interest rate 3.37%Volatility expected 8.23%Expected life of option 5 years




17. SHARE CAPITAL (Continued)

Note ii:

On 10 October 2008, the Company completed its rights issue of 40,977,929 new ordinary shares of RM0.50 each in the Company together with 40,977,929 free new detachable warrants on the basis of one (1) Rights Share together with one (1) free Warrant for every fi ve (5) existing ordinary shares of RM0.50 each.

Note iii:

Warrants from issuance of Bonds

On 30 November 2005, the Company issued a RM150,000,000 nominal value up to eight (8) years 4.5% per annum serial fi xed rate bonds with detachable warrants to the primary subscribers.

On 3 March 2006, the primary subscribers were allotted a total of 18,514,600 warrants to the shareholders at an offer price of RM0.24 per warrant on the basis of one (1) warrant for every fi ve (5) ordinary shares held on entitlement date.

On 29 August 2006, the Company completed the listing of an additional 9,257,000 warrants arising from the bonus issue exercise which was implemented in accordance to the Deed Poll dated 13 January 2006 on the basis of one (1) new warrant for every two (2) warrants held on entitlement date.

On 13 June 2007, the Company completed the listing of an additional 10,095,104 warrants arising from the bonus issue exercise on the basis of two (2) new warrants for every fi ve (5) existing warrants.

During the fi nancial year ended 31 December 2008, the Company issued an additional 1,265,940 units and 4,400 units of new ordinary shares of RM0.50 each arising from the exercise of warrants at an exercise price of RM0.62 per share and RM0.55 per share respectively.

As at 31 December 2008, there is a total of 35,901,972 outstanding (Warrant A) 2006/2016 warrants.

Warrants from issuance of Rights Issue

During the fi nancial year ended 31 December 2008, the Company has issued additional 40,977,929 Warrants 2008/2013 pursuant to the completion of rights issue of 40,977,929 new ordinary shares of RM0.50 each in the Company together with 40,977,929 free new detachable warrants on the basis of one (1) Rights Share together with one (1) free Warrant for every fi ve (5) existing ordinary shares of RM0.50 each.

As at 31 December 2008, there is a total of 40,977,929 outstanding (Warrant B) 2008/2013 warrants.

Note iv:

On 13 June 2007, the Company issued bonus issue of 57,451,876 new ordinary shares of RM0.50 each on the basis of two (2) bonus shares for every fi ve (5) existing shares held and 10,095,104 new additional warrants arising from the adjustment to the number of warrants pursuant to the bonus issue.

18. TREASURY SHARES

On 23 May 2008, the shareholders of the Company approved the Company’s proposal to repurchase its own shares of up to 10% of its issued and paid-up share capital.


18. TREASURY SHARES (Continued)

During the current fi nancial year, the Company had repurchased a total of 2,428,300 ordinary shares of RM0.50 each of its issued share capital from the open market at an average price of RM1.78. The total consideration paid for the repurchase, including transaction costs, was RM4,350,641. The repurchased shares are held as treasury shares in accordance with the requirements of Section 67A (as amended) of the Companies Act, 1965. As at 31 December 2008, the number of outstanding ordinary shares in issue after taking the treasury shares into consideration is 244,161,275 ordinary shares of RM0.50 each.

Details relating to the repurchase during the current fi nancial year are as follows:

Total shares repurchased (units) 2,428,300Total consideration (RM) 4,350,641Highest price (RM) 2.10Lowest price (RM) 0.99Average price (RM) 1.78

19. RESERVES

GROUP COMPANY 2008 2007 2008 2007 RM RM RM RMNon-distributable: Share premium 40,069,770 124,591 40,069,770 124,591Capital reserves 3,433,397 3,738,279 3,433,397 3,738,279Employee Share Option Reserves 1,364,284 1,153,768 622,060 411,544Foreign currency translation reserve (3,843,731) - - -Revaluation reserve 102,258,295 - - - 143,282,015 5,016,638 44,125,227 4,274,414Distributable: Accumulated profi t 59,723,915 29,989,738 1,241,861 893,108 203,005,930 35,006,376 45,367,088 5,167,522

i) Share Premium

The share premium represents premiums received on the initial issuing of the share capital. Any transaction costs associated with the issuing of the shares are deducted from the share premium.

ii) Capital Reserves

Capital reserves represent the value of warrants capitalised for the issuance of serial payment bond with detachable warrants (Note 21) and value of warrants arising from the rights issue on the basis of one (1) rights share together with one (1) free warrant for every fi ve (5) existing ordinary shares. Upon the exercise of the warrants, the value of these warrants will be credited to share premium.

iii) Employee Share Option Reserve

The Employee Share Option Reserve represents the value of services provided under share-based payments.




19. RESERVES (Continued)

iv) Foreign Currency Translation Reserve

The foreign currency translation reserve is used to record exchange differences arising from the translation of the fi nancial statements of foreign operations whose functional currencies are different from that of the Group’s presentation currency. It is also used to record the exchange differences arising from monetary items which from part of the Group’s net investment in foreign operations, where the monetary item is denominated in either the functional currency of the reporting entity or the foreign operation.

v) Revaluation Reserve

The revaluation reserve relates to the revaluation on the seven (7) units of offshore support vessels within the Group.

20. LONG TERM BORROWINGS


Term Financing – I (Note i) 36,701,732 40,641,811 - -Bai Istisna’ (BIS 1) (Note ii) 20,380,000 12,200,000 - -Bai Istisna’ (BIS 2) (Note iii) 41,200,000 13,708,200 - -Bai Istisna’ (BIS 3) (Note iv) 38,930,000 11,418,200 - -Term loan (Note v) 634,300 - - -Islamic Medium Term Notes Programme (“IMTN”) (Note vi) 120,028,833 - 120,028,833 - Total 257,874,865 77,968,211 120,028,833 -Less : Repayable within 12 months (Note 16) (10,585,000) (358,189) - - 247,289,865 77,610,022 120,028,833 -Hire purchase and fi nance lease payables (Note 29) 2,248,332 2,064,622 - - 249,538,197 79,674,644 120,028,833 -

Note i - Term Financing - i

The purpose of this term loan is to fi nance ninety percent (90%) of the construction of one (1) unit Anchor Handling Tug Supply Vessel (AHTS), known as MV Tanjung Dawai for total consideration of RM45,750,000. The loan is repayable within eight (8) years with the profi t rate of 3.00% per annum.

Note ii - Bai Istisna’ (BIS 1)

The purpose of this term loan is to fi nance ninety percent (90%) of the construction cost of one (1) new unit of 60-M Anchor Handling Tug Supply Vessel, known as MV Tanjung Sari. The loan is repayable by 114 monthly installments with the profi t rate of 4.75% per annum.


20. LONG TERM BORROWINGS (Continued)

Note iii - Bai Istisna’ (BIS 2) The purpose of this term loan is to fi nance ninety percent (90%) of the construction cost of one (1) new unit of 60-M Anchor Handling Tug Supply Vessel, known as MV Tanjung Puteri 1. The loan is repayable by 114 monthly installments with the profi t rate of 4.75% per annum.

Note iv - Bai Istisna’ (BIS 3)

The term loan which consist two (2) funds are to fi nance eighty fi ve percent (85%) of the construction cost one (1) new unit of 60-M Anchor Handling Tug Supply Vessel, known as MV Tanjung Puteri 2. The loan is repayable by 114 monthly instalments with profi t rate of 4.75% and 7.75% per annum respectively.

All the facilities mentioned in Note i to iv are secured by the respective vessels under fi nancing, corporate guarantees of the Company, assignment of shipbuilding contracts and future earnings of the respective vessels.

Note v – Term Loan

The term loan is to fi nance the property held under PN 4125, Lot No. 3801, Mukim Teluk Kalong, District of Kemaman, Terengganu Darul Iman.

The term loan interest rate for the fi rst 12 months is 3.28% per annum and repayable within ten (10) years. The said facility is secured by letter of undertaking, notice of assignment, fi xed deposit and corporate guarantee from the Company.

Note vi - IMTN

On 12 December 2007, the Company has announced its proposed issue of, offer for subscription or purchase of, or invitation to subscribe for or purchase of up to RM400,000,000 nominal value Islamic Medium Term Loan (IMTN). As at to date, the Company has issued RM120,028,833 of IMTN.

The IMTN shall be utilised by the Company’s to fi nance the acquisition and/or construction of offshore support vessels, production platforms, lift barges and oil rigs.

The IMTN has tenure of up to fi fteen (15) years from the date of the fi rst issuance of the IMTN. Notwithstanding the tenure of the IMTN, the Company may only request for issuances of the IMTN within the period commencing from the date of the fi nancial close of the IMTN until the 5th anniversary from the date of the fi rst issuance of the IMTN.

The repayment of IMTN with profi t rate is payable semi annually in arrears with the fi rst profi t payment commencing six (6) months from the issue date of the respective IMTN and with the last profi t payment of the respective IMTN to be made on the respective maturity date. The IMTN is secured by:

i) Charge and assignment over the designated accounts;

ii) Assignment of rights, title and interest in all the construction contracts of the new vessels which are to be commissioned for construction from the proceeds of the IMTN;

iii) Assignment of residual rights (if any) pursuant to the construction contracts after the completion of the new vessels;

iv) Assignment of all insurances and charter contracts in respect of the new vessels; and

v) Charge over the new vessels.




21. SERIAL FIXED RATE BOND

GROUP AND COMPANY 2008 2007 RM RM Nominal value of the Bonds issue 150,000,000 150,000,000Equity instrument – detachable warrants (4,402,500) (4,402,500) Proceeds of the bond issue 145,597,500 145,597,500Less: Repayable within 12 months (Note 16) (20,000,000) - 125,597,500 145,597,500

On 25 January 2006, the Company issued RM150,000,000 nominal value of up to 8 years 4.5% per annum serial fi xed rate Bonds (“the Bonds”) with 18,514,600 detachable Warrants (“the Warrants”) to the Primary Subscriber structured on a “Bought Deal” basis, which was constituted by a Trust Deed dated 13 January 2006, comprising 6 series as follows:

Series No. Nominal Values Tenure (RM) (from Issue Date)

1 20,000,000 3 years2 20,000,000 4 years3 25,000,000 5 years4 25,000,000 6 years5 30,000,000 7 years6 30,000,000 8 years

The Bonds are secured by, inter alia, a fi rst party legal charge over the escrow account and the debt service reserve account and a third party fi rst fi xed charge over the three (3) new Straight Supply Vessels namely MV Tanjung Pinang 1, MV Tanjung Pinang 2 and MV Tanjung Pinang 3.

The principal terms of the Warrants are as follows:

a) 18,514,600 detachable Warrants at an issue price of RM0.24 each. As at 31 December 2008, there are a total of 35,901,972 outstanding warrants after taking into account the bonus issue exercises and various conversions into shares of the Company;

b) During the fi nancial year ended 31 December 2008, the exercise price has been adjusted to RM0.55 pursuant to the Company’s rights issue with detachable warrants which is payable in full in respect of each share upon exercise of the Warrants or any such price adjusted in accordance with the terms and conditions set out in the Deed Poll governing the Warrants; and

c) The Warrants may be exercised in ten (10) years from the date of issue of the Warrants. Unexercised Warrants after the exercised year will thereafter lapse and cease to be valid.


22. PROFIT FROM OPERATIONS

Profi t from operations is arrived at: GROUP COMPANY 2008 2007 2008 2007 RM RM RM RMAfter charging: Directors’ remuneration (Note 33) 3,029,600 1,776,367 71,992 67,000Audit fee 106,680 53,000 18,000 18,000Amortisation of intangible assets 247,598 - - -Depreciation of property, plant and equipment 18,395,357 11,575,924 - -Property, plant and equipment written off 364,277 - - -Loss on disposal of property, plant and equipment - 98,485 - -Loss on foreign exchange 2,590,922 262,912 - -Offi ce rental 1,508,736 484,425 - -Staff costs: - Short term benefi ts 24,391,497 12,987,383 - -- EPF contributions 2,013,290 1,179,053 - -- ESOS expenses 210,516 118,931 210,516 118,931

And crediting: Gain on disposal of property, plant and equipment 36,282 - - -Interest income received 1,279,382 341,681 1,229,590 179,067

23. FINANCE COSTS GROUP COMPANY 2008 2007 2008 2007 RM RM RM RM Hire purchase interest 90,226 63,088 - -Leasing interest 79,488 31,368 - -Overdraft interest 1,153,466 1,334,990 - -Term loan interest 3,141,250 - - -Interest on Bonds 7,002,792 6,916,247 - -Revolving credit interest 1,214,267 402,923 - -Amortisation of Bonds issuance cost 201,942 220,021 201,942 140,067 12,883,431 8,968,637 201,942 140,067

24. TAXATION GROUP COMPANY 2008 2007 2008 2007 RM RM RM RM Current year provision 2,976,000 820,000 300,000 7,917,615Over provision in previous year (91,288) - - - 2,884,712 820,000 300,000 7,917,615




24. TAXATION (Continued) GROUP COMPANY 2008 2007 2008 2007 RM RM RM RM Deferred tax relating to the origination and reversal of temporary differences (Note 9) (721,000) 128,000 - -Others - 113,486 - - 2,163,712 1,061,486 300,000 7,917,615Share of taxation of associate company 613,302 15,000 - - Tax expense for the year 2,777,014 1,076,486 300,000 7,917,615

A reconciliation of income tax expense applicable to profi t before taxation at the statutory income tax rate to income tax expense at the effective income tax rate of the Group and of the Company is as follow:

GROUP COMPANY 2008 2007 2008 2007 RM RM RM RM Profi t before taxation 34,225,442 24,305,058 5,189,253 28,031,184Taxation at Malaysian statutory tax rate of 26% (2007:27%) 8,898,615 6,562,365 1,349,206 7,568,420Tax effect on expenses that are not deductible for tax purposes 8,450,798 3,884,853 315,794 349,195Utilisation of capital allowances (13,008,413) (9,571,413) - -Recognition of deferred tax assets (721,000) 128,000 - -Income not subject to tax (1,365,000) - (1,365,000) -Deferred tax assets not recognised - 57,681 - -Over provision in previous year (91,288) - - - 2,163,712 1,061,486 300,000 7,917,615Share of taxation of associate company 613,302 15,000 - - Income tax expense for the year 2,777,014 1,076,486 300,000 7,917,615

25. EARNINGS PER SHARE

a) Basic

The basic earnings per share is calculated by dividing the Group’s net profi t attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares in issue during the current fi nancial year, excluding ordinary shares purchased by the Company and held as treasury shares.

2008 2007 RM RM Net profi t attributable to ordinary equity holders of the parent 31,378,546 23,080,891 Weighted average number of ordinary shares (unit) 214,419,864 200,964,531


25. EARNINGS PER SHARE (Continued)

a) Basic (Continued) CENT CENT

Basic earnings per share 14.63 11.49

b) Diluted

For the diluted earnings per share calculation, the weighted average numbers of ordinary shares in issue during the current

fi nancial year have been adjusted for the dilutive effects of potential ordinary shares in respect of warrants and share

options granted to the employees.

2008 2007 RM RM

Net profi t attributable to ordinary equity holders of the parent 31,378,546 23,080,891

Weighted average number of ordinary shares (unit) 214,419,864 200,964,531

ESOS:

Number of unissued shares (unit) 14,691,000 14,409,350

Warrants:

Number of unexercised warrants (unit) 76,879,901 34,928,164

Diluted weighted average number of ordinary shares (unit) 234,829,714 220,040,738

CENT CENT

Diluted earnings per share 13.36 10.49

26. DIVIDEND

At the Annual General Meeting held on 23 May 2008, a fi nal dividend of 6% or RM0.03 per ordinary share of RM0.50 less 26%

income tax for the fi nancial year ended 31 December 2007 was proposed and approved by the shareholders. The said fi nal

dividend was subsequently paid on 09 June 2008 amounting to RM4,540,500.

On 23 February 2009, a fi nal dividend of 4% or RM0.02 per ordinary share of RM0.50 less 25% income tax for the fi nancial

year ended 31 December 2008 has been proposed by the Company. The aforesaid proposed fi nal dividend is subject to the

approval of the shareholders at the forthcoming Annual General Meeting of the Company which will be held on 26 May 2009.

These fi nancial statements do not refl ect the aforesaid fi nal dividend, which has been accrued as a liability in the fi nancial year

ending 31 December 2009 and subject to the approval by the shareholders of the Company.

The Board has also declared an interim dividend of 8% or RM0.04 per share of RM0.50 (less 25% taxation) for the fi nancial year

ending 31 December 2009. The said interim dividend has been paid on 8 April 2009.




27. PURCHASE OF PROPERTY, PLANT AND EQUIPMENT

GROUP

During the current fi nancial year, the Group made the following cash payments to purchase property, plant and equipment:

2008 2007 RM RM Construction and commissioning of new vessels 177,390,040 104,359,195

Purchase of other property, plant and equipment 13,721,380 7,489,150Financed by hire purchase arrangement (1,208,465) (1,317,258) Cash payments on purchase of property, plant and equipment 189,902,955 110,531,087

28. CASH FLOW STATEMENT – CASH AND CASH EQUIVALENTS

Cash and cash equivalents included in the cash fl ow statement comprises the following balance sheet amounts:


Cash and cash equivalents (Note 13) 76,692,918 20,468,406 59,943,757 7,822,638 Bank overdraft (Note 16) (35,993,062) (11,596,958) - - 40,699,856 8,871,448 59,943,757 7,822,638 Fixed deposits pledged as security (Note 13) (7,714,874) (1,492,506) (5,325,105) - 32,984,982 7,378,942 54,618,652 7,822,638

29. HIRE PURCHASE AND FINANCE LEASE PAYABLES GROUP 2008 2007 RM RM Minimum payment: - Not later than 1 year 1,097,399 710,188 - Later than 1 year and not later than 5 years 2,852,677 2,700,244 3,950,076 3,410,472 Future fi nance charges (832,220) (638,069) 3,117,856 2,772,403 Principal portion payables: - Not later than 1 year (Note 16) 869,524 707,781 - Later than 1 year and not later than 5 years (Note 20) 2,248,332 2,064,622 3,117,856 2,772,403 Effective interest rate 2.78% - 9.79% 2.78% - 9.79%


30. CAPITAL COMMITMENTS

GROUP

As at 31 December 2008, the Group has the following capital commitments:

2008 2007 RM RM Approved and contracted for: Commissioning of seven (7) units of Offshore Support Vessels (2007 : fi ve (5) units) 192,889,600 157,559,600

31. CONTINGENT LIABILITIES

COMPANY

As at 31 December 2008, the Company has the contingent liabilities as follows:

2008 2007 RM RM

Aggregate of corporate guarantees pursuant to banking facilities granted by a fi nancial institutions to the Group 397,048,000 175,930,000

32. SIGNIFICANT EVENTS

i) On 16 January 2008, the Company has incorporated a subsidiary in Indonesia by the name of PT. Tanjung Offshore Nusantara (“PT”). PT has an authorised and paid up share capital of USD150,000 of which the Company owns 80%. The intended business activities of PT will be to provide integrated support services to the oil and gas and related industries in Indonesia.

ii) On 14 March 2008, the Company has successfully drawdown RM80,000,000 from the IMTN Programme for the fi nancing of one (1) unit of Well Testing Vessel amounting to RM47,800,000 and one (1) unit of tug and utility vessel amounting to RM30,250,000. The remaining balances were used as working capital and expenses associated with the IMTN Programme.

iii) On 22 April 2008, Tanjung Offshore Services Sdn. Bhd. (“TOS”) a wholly owned subsidiary of the Company has been awarded a letter of extension of long term charter contract by Petronas Carigali Sdn. Bhd. (“Petronas”) for the provision of an anchor handling tug supply vessel (“AHTS”), namely MV Tanjung Huma, for total charter rates of RM35,000,000.

iv) On 04 June 2008, Tanjung Kapal Services Sdn. Bhd. (“TKS”) a wholly owned subsidiary of the Company has awarded a contract to Muhibbah Marine Engineering Sdn. Bhd. for the construction, commissioning and delivery of two (2) units of AHTS vessels for a total contracted amount of approximately RM100,000,000.

v) On 15 May 2008, TOS has received a Purchase Order from Sime Darby Engineering Sdn Bhd for the provision of a control valve package for BE and BG platforms for a contract value of RM12,000,000.

vi) On 03 July 2008, TOS has been awarded a contract by Petronas for the provision of four (4) units of offshore support vessels for total charter value of RM185,000,000. These contracts are for duration of up to four (4) years effective from the months of August and September 2008.




32. SIGNIFICANT EVENTS (Continued)

vii) On 11 July 2008, TKS has awarded a contract to Grade One Marine Shipyard Sdn. Bhd. for the construction, commissioning and delivery of two (2) units of AHTS vessels for a total contracted amount of approximately RM100,000,000.

viii) On 19 August 2008, TOS has been awarded a contract by Petronas for the provision of one (1) unit of Glycol Dehydration System for the Kumang Cluster Development Project for a contract value of approximately RM30,000,000 which is expected to be completed by July 2009.

ix) On 19 August 2008, TOS has been awarded a contract by Murphy Sarawak Oil Ltd for the provision of Operations and Maintenance Support Services for Murphy’s oil and gas production operations in Malaysia for a total contract value of RM50,000,000.

x) On 15 August 2008 the Company has incorporated the following two (2) companies in England:-

a) Tanjung Citech UK Limited (“Tanjung Citech UK”), a private limited company, with an authorised share capital £1,000,000 divided into 1,000,000 ordinary shares of £1 each. The Company holds 1 ordinary share of £1 representing 100% of the issued and paid-up share capital of Tanjung Citech UK. The principal activity of Tanjung Citech UK is that of an investment holding company.

b) Citech Energy Recovery System UK Limited (“CERS UK”), a private limited company, with an authorised share capital £1,000,000 divided into 1,000,000 ordinary shares of £1 each. Tanjung Citech UK holds 1 ordinary share of £1 representing 100% of the issued and paid-up share capital of CERS UK. The principal activity of CERS UK will be that of manufacturing and marketing of Waste Heat Recovery Units for the offshore oil and gas industry.

xi) On 22 August 2008, the Company announced that:-

a) Tanjung Citech UK has entered into an agreement with Citech Limited (“CL”) for the acquisition of the business and assets of CL for a total cash consideration of £400,000 or RM2,524,000 equivalent; and

b) CERS UK has entered into an agreement with Citech Energy Systems Limited (“CES”) for the acquisition of the business and assets of CES for a total consideration £1,400,000 or RM8,834,000 equivalent to be satisfi ed by the assumption by CERS UK of that amount of overdraft facility debt owed by CES to a fi nancial institution;

xii) On 10 September 2008, CERS UK has been awarded a contract by J. Ray McDermott Asia Pacifi c Pte Ltd for the provision

of two (2) units of Waste Heat Recovery Packages amounting to USD4,000,000 or approximately RM13,600,000 for the Platong Gas II Project in Thailand.

xiii) On 11 September 2008, Tanjung Maintenance Services Sdn. Bhd. (“TMS”) a wholly owned subsidiary of the Company has been awarded a contract by Nippon Oil Exploration (Malaysia) Ltd. (“Nippon Oil”) for the provision of mechanical rotating equipment maintenance services amounting to RM6,000,000.

xiv) On 15 September 2008 the Company announced that:

a) TOS has successfully taken delivery and launched the jack up drilling rig, “THE 208” to support the drilling operations/programme of Murphy Sarawak Oil Co. Ltd. (“Murphy Oil”) in Malaysian waters effective 25 August 2008. The duration of the drilling contract is for three (3) primary years plus two (2) year optional years. The total contract value for the three (3) primary years is RM402,000,000.

b) TKS has successfully taken delivery of an anchor handling tug and supply (AHTS) vessel, MV Tanjung Puteri 1 on 29 July 2008.


32. SIGNIFICANT EVENTS (Continued)

xv) On 20 October 2008, Tanjung Petroconsult Services Sdn. Bhd. a wholly owned subsidiary of the Company has been awarded a contract by Petronas for the provision of design, supply, delivery, fabrication, installation, hookup and commissioning of a fl are system at Baronia and offshore gas terminal amounting to RM17,000,000.

xvi) On 21 October 2008, TOS has been awarded a contract by Malaysia Marine and Heavy Engineering Sdn. Bhd. for the provision of engineering equipment package which comprises of switchgear, controlgear and network monitoring control package for the Gumusut-Kakap Project for a contract value of approximately RM41,000,000.

xvii) On 15 October 2008, TOS has been awarded a contract by Petronas for engineering, procurement, installment and commissioning for triple modular redundancy system upgrading project of a gas processing plant in Paka, Terengganu amounting to RM13,000,000.

33. DIRECTORS’ REMUNERATION

The directors’ remuneration during the current fi nancial year is as follows:


Non-Executive - Fee 60,000 60,000 60,000 60,000- Other emoluments 11,992 7,000 11,992 7,000 71,992 67,000 71,992 67,000 Executive - Share-based payments - 53,984 - -- Other emoluments 2,957,608 1,655,383 834,000 - 2,957,608 1,709,367 834,000 - Total directors’ remuneration 3,029,600 1,776,367 905,992 67,000

Remuneration band:

COMPANY Number of Directors 2008 2007 RM RM

Non-Executive Directors: Below RM50,000 4 4 Executive Directors: RM100,001 – RM200,000 3 2RM200,001 – RM250,000 1 -Above RM250,000 - 1




34. FAIR VALUES OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES

Method and assumption used by the management to determine fair values of each class of fi nancial instruments for which it is practicable to estimate that value are as follows:

i) Cash and cash equivalents and short term borrowings

The carrying amounts approximate fair values due to the relatively short-term maturity of these fi nancial instruments.

ii) Receivables and payables, including balances with related parties

The carrying amounts of trade and other receivables, trade and other payables approximate their respective fair values because these are subject to normal trade credit terms and/or are repayable on demand.

iii) Non-current amount owing by subsidiary company

No disclosure of fair values are made for amount owing by subsidiary company as it is not practicable to determine their fair value with suffi cient reliability since these balances has no fi xed repayment terms.

iv) IMTN, Term loan and hire purchase payables

The carrying amounts as disclosed in Note 20 to the fi nancial statements approximate the fair values, which is determined using discounted cash fl ow analysis.

v) Serial payment bond

The fair value of the serial payment bond has been determined using discounted estimated cash fl ow.

GROUP COMPANY Carrying amount Fair value 2008 2007 2008 2007 RM RM RM RM Serial payment bond 145,597,500 145,597,500 145,435,561 145,435,561

35. SEGMENTAL REPORTING

a) By geographical segment

The Group also operates in other countries as shown in Note 7 to the fi nancial statements. The segmental information is not presented by geographical segment as no other countries contributed more than ten percent (10%) from the Group’s revenue, result and assets respectively other than Malaysia.

b) By business segment

The segmental information is not presented by business segment as there are no other signifi cant business segments other than the provision of integrated services to the oil and gas related industries.


36. SUBSEQUENT EVENTS

i) On 6 January 2009, the Company has entered into a share sale agreement to acquire a 51% equity interest in Gas Generators (Malaysia) Sdn Bhd (“Gastec”) comprising 2,443,633 ordinary shares of RM1 for a total cash consideration of RM5,100,000.

ii) On 06 March 2009, the Company has incorporated a wholly owned subsidiary, Tanjung Citech Sdn. Bhd. The current authorised and paid up share capital of Tanjung Citech Sdn. Bhd. are RM100,000 and RM2 respectively. The intended business activity of Tanjung Citech Sdn. Bhd. is manufacturing and marketing of waste heat recovery units for the offshore oil and gas industry.

37. KEY MANAGEMENT PERSONNEL

Key management personnel are defi ned as those persons having authority and responsibility for planning, directing and controlling the activities of the Company directly or indirectly, including any director of the Company. There are no other key management personnel except for the directors of the Company whose remuneration is disclosed in Note 33 to the fi nancial statements.



As at 31 December 2008, a summary of the land and buildings owned by Tanjung Offshore Services Sdn Bhd (“TOS”) and Tanjung Maintenance Services Sdn Bhd (“TMS”) is set out below:-

No

1.

2.

Title Identifi cation / Postal Address

GRN 38601 Lot No. 25929 Mukim of Setapak, District and State of Wilayah Persekutuan /No. 8-3, Jalan Puncak Setiawangsa 4,54200 Kuala Lumpur; and

GRN 38600 Lot No. 25930 Mukim of Setapak, District and State of Wilayah Persekutuan / No. 10, Jalan Puncak Setiawangsa 4, Taman Setiawangsa, 54200 Kuala Lumpur

GRN 38599 Lot No. 25931 Mukim of Setapak, District and State of Wilayah Persekutuan /No. 2, Jalan Puncak Setiawangsa 4,54200 Kuala Lumpur; and



PN 4114, Lot No. 3790 (formerly known as HS(D) 2670, PT 4199), Mukim of Teluk Kalung, District of Kemaman, State of Terengganu / Lot D1 Kawasan MIELTeluk Kalung24007 KemamanTerengganu Darul Iman

Description And Existing Use / Ownership

3-storey shopoffi ces used as the head offi ce for Tanjung Group /

Owned by TOS

A factory lot used as the Group’s Kemaman Operation Centre providing complete maintenance services /

Owned by TOS

Approximate Age of Building / Tenure / Date of Expiry of Lease

Age of building : approximately 10 years / Tenure : Freehold





Age of building : approximately 2 years / Tenure : 60-year leasehold expiring 22.8.2057

Land Area / (Built-Up Area)

(sq. ft.)

1,760 / (4,634)

1,760 / (4,634)

1,760 / (4,634)

1,760 / (4,634)

1,760 / (4,634)

21,427 / (8,626)

Net Book Value As At

31 December 2008(RM)

608,823.07

688,000

1,182,587.63

1,164,000

1,019,388.04

822,685.89

LIST OF PROPERTIES OWNED BY THE GROUP


LIST OF PROPERTIES OWNED BY THE GROUP

As at 31 December 2008, a summary of the land and buildings owned by Tanjung Offshore Services Sdn Bhd (“TOS”) and Tanjung Maintenance Services Sdn Bhd (“TMS”) is set out below:-

No

3.

4.

Title Identifi cation / Postal Address

PN 4115, Lot No. 3791 (formerly known as HS(D) 2671, PT 4200), Mukim of Teluk Kalung, District of Kemaman, State of Terengganu / Lot D2 Kawasan MIELTeluk Kalung24007 KemamanTerengganu Darul Iman

PN 4125, Lot No 3801(Formerly known as HSD) 2681, PT 4200),Mukim of Teluk KalongDistrict of Kemaman, State of Terengganu.Lot D12, Kawasan MIEL, Teluk Kalung,24007 Kemaman, Terengganu.

Description And Existing Use / Ownership

A factory lot used as the Group’s Kemaman Operation Centre providing complete maintenance services. /

Owned by TOS

A factory lot used as the Group’s Kemaman Operation Centre providing complete maintenance services. /

Owned by TMS

Approximate Age of Building / Tenure / Date of Expiry of Lease

Age of building : approximately 1.5 years / Tenure : 60-year leasehold expiring 22.8.2057

Age of building : Aproximately 3 yrs 10 mths.Tenure : 60 years leaseholdExpiring : 23.08.2057

Land Area / (Built-Up Area)

(sq. ft.)

16,017 / (8,626)

20,355/(8,626)

Net Book Value As At

31 December 2008(RM)

776,981.11

695,240


ANALYSIS OF SHAREHOLDINGS

ANALYSIS OF SHAREHOLDINGS AS AT 1 APRIL 2009

Authorised Share Capital - RM200,000,000.00

Issued and Paid-up Share Capital - RM122,110,087.50

Class of Shares - Ordinary Share of RM0.50 each

Voting Rights - One vote per share

ANALYSIS BY SIZE OF SHAREHOLDINGS NO.OF NO. OF SIZE OF SHAREHOLDINGS SHAREHOLDERS % SHARES %

1 - 99 87 3.30 2,740 0.00100 - 1000 436 16.53 360,678 0.151,001 - 10,000 1,561 59.20 6,480,690 2.6510,001 - 100,000 462 17.52 12,953,932 5.30100,001 - 12,211,007 87 3.30 82,375,313 33.7312,211,008 AND ABOVE 4 0.15 142,046,822 58.16(5% OF ISSUED SECURITIES)

T O T A L 2,637 100.00 244,220,175 100.00

REGISTER OF SUBSTANTIAL SHAREHOLDERS AS AT 1 APRIL 2009 SHARES HELD PERCENTAGE

1 HAJI OMAR BIN KHALID 102,190,422 41.84 2 HAJI ABDULLAH BIN HASHIM 33,670,910 13.78

4 LEMBAGA TABUNG HAJI 14,510,400 5.94

150,371,732 61.56

TOTAL ISSUED SHARES AS AT 1 APRIL 2009 : 246,697,175TREASURY SHARES AS PER ROD DATED 1 APRIL 2009 : 2,477,000‘ADJUSTED’ CAPITAL AFTER NETTING TREASURY SHARES AS AT 1 APRIL 2009 : 244,220,175


RE

GIS

TE

R O

F D

IRE

CT

OR

S’

SH

AR

EH

OL

DIN

GS

, E

SO

S O

PT

ION

S,

WA

RR

AN

T B

AS

AT

1 A

PR

IL 2

00

9

E

SO

S O

pti

ons

W

arra

nts

A

War

rant

s B

O

rdin

ary

Sha

res

as a

t 1

Ap

ril 2

009

as

at 1

Ap

ril 2

009

a

s at

1 A

pri

l 200

9

as

at

1 A

pri

l 200

9

Dir

ect

I

ndir

ect

Dir

ect

Ind

irec

t

Dir

ect

In

dir

ect

Dir

ect

I

ndir

ect

N

o. o

f

No

. of

No

. of

N

o. o

f

No

. of

No

. of

Dir

ecto

rs

Sha

res

*%

Sha

res

%

War

rant

s *%

W

arra

nts

%

War

rant

s *%

W

arra

nts

%

Sen

ator

Dat

uk

Sye

d A

li bi

n

Tan

Sri

Sye

d

Abb

as A

lhab

shee

42

0,00

0 0.

17

- -

- -

89,5

99

0.25

-

- -

- -

-

Haj

i Om

ar

bin

Kha

lid

102,

190,

422

41.8

4 10

0,80

0*

0.04

1,

791,

400

67,0

00*

18,4

35,2

70

51.3

5 17

,919

* 0.

05

17,0

31,7

37

41.5

6 16

,800

* 0.

04

Haj

i Abd

ulla

h

bin

Has

him

33

,670

,910

13

.78

- -

1,20

9,60

0 14

,800

* 5,

999,

508

16.7

1 -

- 5,

632,

335

15.6

8 -

-

Ham

idon

bin

Md

Kha

yon

47,0

00

0.02

-

- 1,

344,

000

- -

- -

- -

- -

-

Za’a

ba b

in S

edek

40

,870

0.

02

- -

- -

- -

- -

- -

- -

Haj

i Ab

Wah

ab

bin

Haj

i Ibr

ahim

12

8,10

0 0.

05

- -

- -

- -

- -

- -

- -

Edw

anee

Che

ah

bin

Abd

ulla

h 1,

580,

124

0.65

-

- -

- 13

6,41

5 0.

38

- -

263,

354

0.64

-

-

Geo

rge

Willi

am

War

ren

Jr

879,

480

0.36

-

- -

- 15

6,79

9 0.

44

- -

146,

580

0.36

-

-

* D

eem

ed in

tere

st b

y vi

rtue

of S

ectio

n 13

4 of

the

Com

pani

es A

ct, 1

965



THE 30 LARGEST SECURITIES ACCOUNT HOLDERS

HOLDER NAME SHARES HELD PERCENTAGE

1 AMSEC NOMINEES (TEMPATAN) SDN BHD 79,650,000 32.61 QUALIFIER:AMBANK (M) BERHAD FOR OMAR BIN KHALID

2 AMSEC NOMINEES (TEMPATAN) SDN BHD 25,346,000 10.38 QUALIFIER:AMBANK (M) BERHAD FOR ABDULLAH BIN HASHIM

3 OMAR BIN KHALID 22,540,422 9.23

4 LEMBAGA TABUNG HAJI 14,510,400 5.94

5 ABDUL RASHID HUSSAIN 10,080,000 4.13

6 CIMSEC NOMINEES (ASING) SDN BHD 7,560,000 3.10 QUALIFIER:ALIZA ABDUL RAHIM NEE LUM KOK CHUN

7 ABDULLAH BIN HASHIM 6,491,510 2.66

8 RAHMANDIN @ RAHMANUDIN BIN MD SHAMSUDIN 5,763,120 2.36

9 AMANAH RAYA NOMINEES (TEMPATAN) SDN BHD 4,973,376 2.04 QUALIFIER:AMANAH SAHAM MALAYSIA

10 AMANAH RAYA NOMINEES (TEMPATAN) SDN BHD 4,144,344 1.70 QUALIFIER:PUBLIC ISLAMIC OPPORTUNITIES FUND

11 AMANAH RAYA NOMINEES (TEMPATAN) SDN BHD 3,944,800 1.62 QUALIFIER:PUBLIC ISLAMIC BALANCED FUND

12 MALAYSIA NOMINEES (TEMPATAN) SENDIRIAN BERHAD 2,990,827 1.22 QUALIFIER:GREAT EASTERN LIFE ASSURANCE (MALAYSIA) BERHAD

13 YANG KIM MOI 2,698,500 1.10

14 MALAYSIA NOMINEES (TEMPATAN) SENDIRIAN BERHAD 2,139,504 0.88 QUALIFIER:GREAT EASTERN LIFE ASSURANCE (MALAYSIA) BERHAD

15 AMANAH RAYA NOMINEES (TEMPATAN) SDN BHD 1,998,400 0.82 QUALIFIER:PUBLIC ISLAMIC OPTIMAL GROWTH FUND

16 EB NOMINEES (TEMPATAN) SENDIRIAN BERHAD 1,853,400 0.76 QUALIFIER:PLEDGED SECURITIES ACCOUNT FOR ABDULLAH BIN HASHIM

17 AMANAH RAYA NOMINEES (TEMPATAN) SDN BHD 1,808,940 0.74 QUALIFIER:PUBLIC INDEX FUND




THE 30 LARGEST SECURITIES ACCOUNT HOLDERS (Continued)


18 EDWANEE CHEAH BIN ABDULLAH 1,280,124 0.52

19 MALAYSIA NOMINEES (TEMPATAN) SENDIRIAN BERHAD 1,116,492 0.46 QUALIFIER:GREAT EASTERN LIFE ASSURANCE MALAYSIA) BERHAD

20 SYED ABDILLAH BIN SYED ABAS 1,003,840 0.41

21 WARREN STEPHEN ORLANDO JR 1,003,200 0.41

22 AMANAH RAYA NOMINEES (TEMPATAN) SDN BHD 978,700 0.40 QUALIFIER:SEKIM AMANAH SAHAM NASIONAL

23 AMANAH RAYA NOMINEES (TEMPATAN) SDN BHD 940,440 0.39 QUALIFIER:PB ISLAMIC ASIA STRATEGIC SECTOR FUND

24 CITIGROUP NOMINEES (ASING) SDN BHD 900,000 0.37 QUALIFIER:CIPLC FOR ASIA PACIFIC PERFORMANCE FUND

25 GEORGE WILLIAM WARREN JR 879,480 0.36

26 SYED ABDILLAH BIN SYED ABAS 784,200 0.32

27 MAYBAN NOMINEES (TEMPATAN) SDN BHD 742,500 0.30 QUALIFIER:MAYBAN TRUSTEES BERHAD FOR PUBLIC INDUSTRY FUND (N14011930270)

28 NOORSIAH BINTI MOHAMED SHAMSUDDIN 732,000 0.30 29 HSBC NOMINEES (ASING) SDN BHD 695,000 0.28 QUALIFIER:UBS AG ZURICH FOR LGT CAPITAL MANAGEMENT LTD.

30 MOHD SHAZLI BIN MOHAMED 605,640 0.25

210,155,159 86.05

TOTAL ISSUED SHARES AS AT 1 APRIL 2009 : 246,697,175TREASURY SHARES AS PER ROD DATED 1 APRIL 2009 : 2,477,000‘ADJUSTED’ CAPITAL AFTER NETTING TREASURY SHARES AS AT 1 APRIL 2009 : 244,220,175


ANALYSIS OF WARRANTHOLDINGS (WARRANT A 2006/2016)

ANALYSIS BY SIZE OF WARRANTHOLDINGS (WARRANT A 2006/2016)

NO.OF NO. OF SIZE OF WARRANTHOLDINGS WARRANTHOLDERS % WARRANT %

1 - 99 2 7.69 1,475 0.00100 - 1000 98 27.92 48,885 0.141,001 - 10,000 154 43.87 552,617 1.5410,001 - 100,000 57 16.24 1,701,453 4.74100,001 - 1,795,097 12 3.42 7,243,085 20.171,795,098 AND ABOVE 3 0.85 26,354,457 73.41(5% OF ISSUED SECURITIES)

T O T A L 351 100.00 35,901,972 100.00

WARRANTHOLDINGS WITH 5.0 % AND ABOVE


1 OMAR BIN KHALID 18,435,270 51.35



26,354,457 73.41

TOTAL ISSUED WARRANTS : 35,901,972


THE 30 LARGEST WARRANTHOLDERS

HOLDER NAME WARRANT HELD PERCENTAGE

1 OMAR BIN KHALID 18,435,270 51.35




5 HSBC NOMINEES (ASING) SDN BHD 1,783,039 4.97 QUALIFIER:TNTC FOR ATLANTIS ASIAN RECOVERY FUND

6 RAHMANDIN @ RAHMANUDIN BIN MD SHAMSUDIN 999,039 2.78 7 SYED ABDILLAH BIN SYED ABAS 750,399 2.09

8 CIMSEC NOMINEES (TEMPATAN) SDN BHD 522,666 1.46 QUALIFIER:CIMB BANK FOR LIM CHA BOH @ LIM LAI YOKE (MY0157)

9 CIMSEC NOMINEES (TEMPATAN) SDN BHD 516,516 1.44 QUALIFIER:CIMB BANK FOR TEH SWEE HENG (MM1118)

10 SYED ALWI BIN SYED ABBAS AL-HABSHEE 179,199 0.50

11 NG KEK CHONG 159,999 0.45


13 EDWANEE CHEAH BIN ABDULLAH 136,415 0.38 14 CHEN BOON HEOW 111,999 0.31

15 MOHD SHAZLI BIN MOHAMED 100,351 0.28

16 LEE ME LAY 98,858 0.28

17 SYED ALI BIN ABBAS ALHABSHEE 89,599 0.25

18 PEH AH CHUAN 86,309 0.24 19 PUNEET KUMAR A/L MOHAN LAL 68,183 0.19

20 EVELYN LAU SIE JIONG 57,663 0.16 21 LIM CHA BOH @ LIM LAI YOKE 53,343 0.15



THE 30 LARGEST WARRANTHOLDERS (Continued)


22 ECML NOMINEES (ASING) SDN. BHD. 50,559 0.14 QUALIFIER:ALIZA ABDUL RAHIM NEE LUM KOK CHUN (009)

23 RHB CAPITAL NOMINEES (TEMPATAN) SDN BHD 50,000 0.14 QUALIFIER:PLEDGED SECURITIES ACCOUNT FOR KWAN WING HUNG (071595)

24 CHEW SAN DEE 49,100 0.14

25 CHEN KIM FAH 45,866 0.13

26 TA NOMINEES (TEMPATAN) SDN BHD 44,799 0.12 QUALIFIER:PLEDGED SECURITIES ACCOUNT FOR BASARIAH BINTI HASHIM

27 SYED OSMAN BIN SYED OMAR 44,799 0.12

28 GURUBACHAN SINGH @ GURUBACHAN 44,799 0.12 SINGH JOHAL A/L AMAR SINGH

29 LIM LEY MOI 38,737 0.11

30 NG WAN HONG @ NG WAN FON 37,333 0.10

34,422,824 95.88




ANALYSIS OF WARRANTHOLDINGS (WARRANT B 2008/2013)

ANALYSIS BY SIZE OF WARRANTHOLDINGS

NO.OF NO. OF SIZE OF WARRANTHOLDINGS WARRANTHOLDERS % WARRANT %

1 - 99 13 1.62 162 0.00100 - 1000 332 41.40 194,444 0.471,001 - 10,000 275 34.29 1,060,899 2.5910,001 - 100,000 147 18.33 4,823,212 11.77100,001 - 2,048,895 33 4.11 12,546,540 30.622,048,896 AND ABOVE 802 100.00 40,977,929 100.00(5% OF ISSUED SECURITIES)

T O T A L 351 100.00 35,901,972 100.00

WARRANTHOLDERS WITH HOLDINGS 5.0 % AND ABOVE


1 OMAR BIN KHALID 17,031,737 41.56


22,352,672 54.55

TOTAL ISSUED WARRNATS : 40,977,929


THE 30 LARGEST WARRANTHOLDERS


1 OMAR BIN KHALID 17,031,737 41.56




5 LIM SERN PAUL 1,125,000 2.75

6 WONG AH KUM 1,030,600 2.52

7 RAHMANDIN @ RAHMANUDIN BIN MD SHAMSUDIN 960,520 2.34 8 BONG NYON 655,000 1.60

9 LIM CHA BOH @ LIM LAI YOKE 600,000 1.46

10 HSBC NOMINEES (ASING) SDN BHD 445,000 1.09 QUALIFIER:TNTC FOR ATLANTIS ASIAN RECOVERY FUND

11 CHUA SEU MOOI 370,000 0.90

12 MARY TAN @ TAN HUI NGOH 354,600 0.87

13 EB NOMINEES (TEMPATAN) SENDIRIAN BERHAD 311,400 0.76 QUALIFIER:PLEDGED SECURITIES ACCOUNT FOR ABDULLAH BIN HASHIM

14 EU MUI @ EE SOO MEI 286,806 0.70

15 TEE CHAI HUAT 269,100 0.66

16 EDWANEE CHEAH BIN ABDULLAH 263,354 0.64

17 CHAP KAR KAR 200,300 0.49

18 CHONG KAH LEONG 200,000 0.49

19 CHA YUEN CHING 200,000 0.49

20 CITIGROUP NOMINEES (TEMPATAN) SDN BHD 180,000 0.44 QUALIFIER:PLEDGED SECURITIES ACCOUNT FOR KOK CHEE YUN @ KOK CHEE YAN



THE 30 LARGEST WARRANTHOLDERS (Continued)


21 CHONG KAH AN 180,000 0.44

22 NG HO FATT 170,900 0.42

23 WARREN STEPHEN ORLANDO JR 167,200 0.41

24 SU AN LEE 155,800 0.38

25 HEON CHEE KEONG 147,000 0.36


27 NG WAI YUAN 143,200 0.35

28 YAP LEON KEE @ YAP YAU SENG 132,000 0.32

29 SYED ABDILLAH BIN SYED ABAS 125,640 0.31

30 NOORSIAH BINTI MOHAMED SHAMSUDDIN 122,000 0.30

34,234,672 83.54



This page has been left blank intentionally.

(Please indicate with an “X” in the spaces provided on how you wish your vote to be cast. In the absence of specifi c direction, your proxy will vote or abstain as he / she thinks fi t)

Signed this day of 2009.

No. of Shares Held

.................................................................... Signature of Shareholder or Common Seal

Notes:-

1. A member entitled to attend and vote at the meeting shall not be entitled to appoint more than two (2) proxies to attend and vote in his/her stead. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply.

2. Where a member appoints two (2) proxies, the appointment shall be invalid unless he/she specifi es the proportions of his/her shareholding to be represented by each proxy.

3. Where a Member is an authorised nominee as defi ned under the Securities Industry (Central Depositories) Act, 1991, it may appoint at least one (1) proxy in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said Securities Account.

4. The instrument appointing a proxy shall be in writing under the hand of the appointer or of his/her attorney duly authorised in writing or, if the appointer is a corporation, either under its Common Seal or under the hand of its offi cer or attorney duly authorised.

5. The instrument appointing a proxy and the power of attorney or other authority (if any), under which it is signed or a notarially certifi ed copy thereof, must be deposited at the Registered Offi ce of the Company at 312, 3rd Floor, Block C, Kelana Square, 17 Jalan SS7/26, 47301 Petaling Jaya, Selangor Darul Ehsan not less than forty eight hours (48) hours before the time appointed for holding the Fourth Annual General Meeting or any adjournment thereof.

I/We ................................................................................................................................................................................

NRIC No./Company No.................................................................. of .............................................................................

................................................................................................ being a Member/Members of Tanjung Offshore Berhad

(“the Company”), hereby appoint ....................................................................................................................................

of ...................................................................................................................................................................... or failing

him/her ....................................................................................... of ................................................................................

..............................................................................................as my/our proxy to vote for me/us and on my/our behalf at the Fifth Annual General Meeting of the Company to be held at Kenanga Room, Kelab Darul Ehsan, Taman Tun Abdul Razak, Jalan Kerja Air Lama, 68000 Ampang Jaya, Selangor Darul Ehsan on Friday, 26 May 2009 at 10:00 a.m. and at any adjournment thereof in the manner as indicated below:-

TANJUNG OFFSHORE BERHAD (662315-U) (Incorporated in Malaysia under the Companies Act, 1965)

FORM OF PROXY

For AgainstRESOLUTION

Resolution No. 1

Resolution No. 2

Resolution No. 3

Resolution No. 4

Resolution No. 5

Resolution No. 6

Resolution No. 7

Resolution No. 8

Resolution No. 9

Resolution No. 10

NO.

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

TANJUNG OFFSHORE BERHAD (Company No.: 662315-U)312, 3rd Floor, Block CKelana Square, 17 Jalan SS7/2647301 Petaling JayaSelangor Darul Ehsan

FOLD THIS FLAP FOR SEALING

FOLD HERE

FOLD HERE

STAMP

Documents

TANJUNG OFFSHORE BERHAD - Malaysiastock.biz 2 TANJUNG OFFSHORE BERHAD (662315-U) ANNUAL REPORT 2008 CORPORATE INFORMATION BOARD OF DIRECTORS Senator Datuk Wira Syed Ali Bin Tan Sri